Task 1

The corporation decided to purchase a production line at a price of 27 000 million rubles.
According to calculations, immediately after the launch of the line, annual cash inflows after
deducting expenses and taxes will be 8 200 million rubles. The line is designed for 5 years. The
discount rate is 12%.

Determine the possibility of accepting the project using NPV.

Task 2
Asses the net present value (NPV) of the investment project and the discounted payback period
based on the following data:

Cash Flows Periods

0 1 2 3 4
Amount of investment (million 100000 - - - -
rubles)
Revenues from sales - 20000 25000 26000 27000
(million rubles)
Operating expenses, taxes - 6800 6800 6800 6800
(million rubles)

Financing of the selected project can be carried out at the expense of a bank loan at 18% per
annum.

Task 3
Year Project 1 Project 2 Project 3 Project 4
0( ) 7800 7800 7800 7800
1( ) 0 0 600 800
2 1700 1850 1450 1900
3 2250 2500 3500 4500
4 3200 3600 5600 3250
5 4300 4300 2700 2100
Situation : We have the following initial data on cash flows for several projects of the
corporation:
Financing of the selected project can be carried out at the expense of a bank loan at 12% per
annum.
Task : Evaluate the feasibility of choosing one of the projects in terms of net present value
(NPV) and return on investment (PI). Rank projects according to the value of the indicator net
present value (NPV).

Task 4
The construction of a cannery is planned. The investor is offered two options for the construction
project:

Indicators Project 1 Project 2

Estimated cost of construction (million rubles) 1500 1500
The cost of the annual volume of production (million rubles) 3500 3300
Non-operating income (million rubles) 750 460
Cost of annual output (million rubles) 2980 2070
 Selling expenses (million rubles) 150 150
Management expenses (million rubles) 20 20
Other expenses (million rubles) 33 33
Taxes (%) 30 30

The investor presented certain requirements for the project. He would like the payback period of
the project to be within three years, and the rate of return on the project would be at least 20%.

It is required to calculate economic efficiency indicators (ROI, PP) for each of the plant
construction options and, based on the results of the analysis, select the best project. Justify your
choice.

Task 5
We have the following initial cash flow data for several projects:
Period Project 1 Project 2 Project 3 Project 4
0 -2800 -2800 -2800 -2800
1 0 200 600 800
2 700 850 1450 1900
3 1250 1500 1500 1500
4 1200 1600 1600 2250
5 2300 2300 2700 2100

Assess the feasibility of choosing one of the projects in terms of net present value (NPV) and
profitability index (PI). Financing of the selected project can be carried out at the expense of a
bank loan at 12% per annum.

Rank projects according to the value of the net present value (NPV).