6.lesson 3 - Net Present Value and Other Investment Rules

Net Present Value and Other Investment Rules
By Dr. Chin, Phaik Nie
Copyright © 2019 McGraw-Hill Education. All rights reserved.

No reproduction or distribution without the prior written consent of McGraw-Hill Education.
} Be able to compute payback and discounted payback
and understand their shortcomings
} Be able to compute the internal rate of return and
profitability index, understanding the strengths and
weaknesses of both approaches
} Be able to compute net present value and understand
why it is the best decision criterion

5-1
5.1 Why Use Net Present Value?
5.2 The Payback Period Method
5.3 The Discounted Payback Period Method
5.4 The Internal Rate of Return
5.5 Problems with the IRR Approach
5.6 The Profitability Index
5.7 The Practice of Capital Budgeting

5-2
} Accepting positive NPV projects benefits
stockholders.
üNPV uses cash flows
üNPV uses all the cash flows of the project
üNPV discounts the cash flows properly
Note that the NPV recognizes the magnitude, risk, and timing of
cash flows, which was an important description of why stock
price maximization should be the primary corporate goal.

5-3
} Net Present Value (NPV) =
Total PV of future CFs + Initial investment
Note that although we add the initial investment, this value is a negative number.
} Estimating NPV:
1. Estimate future cash flows: How much? And
when?
2. Estimate discount rate
3. Estimate initial costs
} Minimum Acceptance Criteria: Accept if NPV > 0
} Ranking Criteria: Choose the highest NPV

5-4
} Spreadsheets are an excellent way to compute NPVs,
especially when you have to compute the cash flows
as well.
} Using the NPV function:
◦ The first component is the required return entered as a
decimal.
◦ The second component is the range of cash flows beginning
with year 1.
◦ Add the initial investment after computing the NPV.

5-5
Year 0 1 2 3
Cash Flows -165000 63120 70800 91080
Required rate of return is 12%

@FC: Press CF 2ND CE/E to clear previous memory
CF0 = -165000 ENTER ↓
C01 = 63120 ENTER ↓ F01 = 1 ↓
C02 = 70800 ENTER ↓ F02 = 1 ↓
C03 = 91080 ENTER ↓ F03 = 1 ↓
C04 = 0.00000, Press NPV, I = 12 ENTER ↓
NPV = 0.00000, press CPT.
The answer is 12627.41
Copyright © 2019 USM. All rights reserved.

No reproduction or distribution without the prior written consent of USM.
5-6
} Using the NPV rule for capital budgeting decision,
which project will you choose? Assume that the rate
of return is 10% for both projects.
Year Cash outflow/inflow ($)
Project A Project B
0 -10,000 -10,000
1 5,000 1,000
2 4,000 3,000
3 3,000 4,000
4 1,000 6,000

5-7
} Using the NPV rule for capital budgeting decision,
which project will you choose? Assume that the rate
of return is 10% for both projects.
Project A Project B
0 -10,000 -10,000
1 5,000 1,000
2 4,000 3,000
3 3,000 4,000
4 1,000 6,000
NPV 788.19 491.77

5-8
} @FC: Press CF 2ND CE/E to clear } @FC: Press CF 2ND CE/E to clear
previous memory previous memory
} CF0 = -10000 ENTER ↓ } CF0 = -10000 ENTER ↓
} C01 = 1000 ENTER ↓ F01 = 1 ↓
} C01 = 5000 ENTER ↓ F01 = 1 ↓ } C02 = 3000 ENTER ↓ F02 = 1 ↓
} C02 = 4000 ENTER ↓ F02 = 1 ↓ } C03 = 4000 ENTER ↓ F03 = 1 ↓
} C03 = 3000 ENTER ↓ F03 = 1 ↓ } C04 = 6000 ENTER ↓ F03 = 1 ↓
} C04 = 1000 ENTER ↓ F03 = 1 ↓ } C05 = 0.00000, Press NPV, I = 10
} C05 = 0.00000, Press NPV, I = 10 ENTER ↓
} NPV = 0.00000, press CPT.
ENTER ↓
} The answer is 491.77
} NPV = 0.00000, press CPT.
} The answer is 788.19
Project A Project B
The Yurdone Corporation wants to set up a private cemetery business.
According to the CFO, Barry M. Deep, business is “looking up”. As a
result, the cemetery project will provide a net cash inflow of $290,000
for the firm during the first year, and the cash flows are projected to
grow at a rate of 5 percent per year forever. The project requires an
initial investment of $3,900,000.
a) If Yordone requires a return of 11 percent on such undertakings,

should the cemetery business be started?
b) The company is somewhat unsure about the assumption of a growth

rate of 5 percent in its cash flows. At what constant growth rate would
the company just break even if it still required a return of 11 percent on
investment?

5-10
! %&','''
a) 𝑃𝑉 = "#$
= '.** #'.'+
= 4,8333,333.33
NPV = - cost + PV
= - $3,900,000 + $4,833,333.33
= $933,333.33
NPV > 0, so accept the project.
@FC: Press CF 2ND CE/E to clear previous memory

CF0 = -3,900,000 ENTER ↓
C01 = 290,000 ENTER ↓ F01 = 500 ENTER ↓
C02 = 0.00000, Press NPV, I = 6 ENTER ↓
NPV = 0.00000, press CPT PV.

5-11
! %&','''
b) 𝑃𝑉 = "#$
= '.** #$
NPV = 0 if break even.

NPV = - cost + PV
$"#$,$$$
0 = - $3,900,000 +
$.'' ()
$"#$,$$$
$3,900,000 =
$.'' ()
$3,900,000 (0.11 – g) = $290,000
$429,000 - $3,900,000g = $290,000
"#$,$$$ (*"#,$$$
g= = 0.03564
(+,#$$,$$$
The constant growth rate is 3.56%.

5-12
} How long does it take the project to “pay back” its
initial investment?
} Payback Period = number of years to recover initial
costs
} Minimum Acceptance Criteria:
◦ Set by management
} Ranking Criteria:
◦ Set by management
!"##"$%&'() *%+, -$./ 0)-.1) -"$$ 1)*.()12
Pbi = No. of years before full recovery +
!%+, -$./ 3"1'45 -"$$ 1)*.()12 2)%1

5-13
} Disadvantages:
◦ Ignores the time value of money
◦ Ignores cash flows after the payback period
◦ Biased against long-term projects
◦ Requires an arbitrary acceptance criteria
◦ A project accepted based on the payback criteria may not
have a positive NPV
} Advantages:
◦ Easy to understand
◦ Biased toward liquidity

5-14
} Let us assume that there are two projects, A and B with
the cash flows given in the table below. Using the
information given, calculate the payback period of each
project.
Project A Project B
0 -10,000 -10,000
1 5,000 1,000
2 4,000 3,000
3 3,000 4,000
4 1,000 6,000

5-15
Year Project A Project B
Cash Flow Cumulative Cash Flow Cumulative

Cash Flow Cash Flow
0 -10,000 -10,000 -10,000 -10,000
1 5,000 -5,000 1,000 -9,000
2 4,000 -1,000 3,000 -6,000
3 3,000 2,000 4,000 -2,000
4 1,000 3,000 6,000 4,000
PBi 2+
',$$$
= 3+ =
",$$$
+,$$$ ,,$$$
2.33 years 3.33 years

5-16
Calculating Payback Period and NPV Fuji Software, Inc., has the
following mutually exclusive projects

0 -$15,000 -$18,000
1 9,500 10,500
2 6,000 7,000
3 2,400 6,000
Suppose Fuji’s payback period cutoff is two years. Which of these two
projects should be chosen?

5-17
Cash Flow Cumulative Cash Flow Cumulative

Cash Flow Cash Flow
0 -15,000 -15,000 -18,000 -18,000
1 9,500 -5,500 10,500 -7,500
2 6,000 500 7,000 -500
3 2,400 2,900 6,000 5,500
PBi 1+
-,-$$
= 2+ =
-$$
,,$$$ ,,$$$
1.92 years 2.08 years
Project A should be selected.

5-18
} How long does it take the project to “pay back” its
initial investment, taking the time value of money
into account?
} Decision rule: Accept the project if it pays back on a
discounted basis within the specified time.
} By the time you have discounted the cash flows, you
might as well calculate the NPV.
./00/123456 78696:3 ;21/6 <6=>86 =/11 86?>568@
DPbi = No. of years before full recovery +
78696:3 521/6 A/84:) =/11 86?>568@ @628

5-19
} Using the same example, let’s calculate the discounted
payback period for project A and B if the required rate of
return for both projects are 10%.
Project A Project B
0 -10,000 -10,000
1 5,000 1,000
2 4,000 3,000
3 3,000 4,000
4 1,000 6,000

5-20
Year Cash Flow $ Present Value Cumulative
Present value
0 -10,000 -10,000 -10,000
1 5,000 4,545 -5,455
2 4,000 3,306 -2,149
3 3,000 2,254 105
4 1,000 683 788
PBA

5-21
Year Cash Flow $ Present Value Cumulative
Present value
0 -10,000 -10,000 -10,000
1 1,000 909 -9,091
2 3,000 2,479 -6,612
3 4,000 3,005 -3,607
4 6,000 4,098 491
PBB

5-22
An investment project has annual cash inflows
of $5,000, $5,500, $6,000 and $7,000 and a
discount rate of 14 percent. What is the
discounted payback period for these cash flows
if the initial cost is $8,000? What if the initial
cost is $12,000? What if it is $16,000?

5-23
Discount rate = 14%
PV1 = 5000/1.14 = 4385.96
PV2 = 5500/(1.14)2 = 4232.07
PV3 = 6000/(1.14)3 = 4049.83
PV4 = 7000/(1.14)4 = 4144.56
} Discounted payback when initial cost is 8000:
(78999:;<8=.?@)
DPb = 1 + = 1.85396
;B<B.9C
(7DB999:;<8=.?@:;B<B.9C)
DPb = 2 + = 2.83509
;9;?.8<
(7D@999:;<8=.?@:;B<B.9C:;9;?.8<)
DPb = 3 + = 3.80398
;D;;.=@

5-24
} IRR: the discount rate that sets NPV to zero
◦ Accept if the IRR exceeds the required return
} Ranking Criteria:
◦ Select alternative with the highest IRR
} Reinvestment assumption:
◦ All future cash flows are assumed to be reinvested at the
IRR

5-25
} Disadvantages:
◦ Does not distinguish between investing and borrowing
◦ IRR may not exist, or there may be multiple IRRs
◦ Problems with mutually exclusive investments
} Advantages:
◦ Easy to understand and communicate

5-26
Consider the following project:
$50 $100 $150
0 1 2 3
-$200
The internal rate of return for this project is 19.44%
$50 $100 $150
NPV = 0 = -200 + + 2 +
(1+ IRR) (1+ IRR) (1+ IRR) 3

5-27
} @FC: Press CF 2ND CE/E to clear previous memory
} CF0 = -200 ENTER ↓
} C01 = 50 ENTER ↓ F01 = 1 ↓
} C02 = 100 ENTER ↓ F02 = 1 ↓
} C03 = 150 ENTER ↓ F03 = 1 ↓
} C05 = 0.00000, Press IRR, IRR = 0.00000, then
Press CPT
} The answer is 19.44%

5-28
If we graph NPV versus the discount rate, we can see the IRR
as the x-axis intercept.
0% $100.00 $150.00
4% $73.88
8% $51.11 $100.00
12% $31.13
16% $13.52 $50.00
NPV
20% ($2.08) IRR = 19.44%
24% ($15.97) $0.00
28% ($28.38) -1% 9% 19% 29% 39%
32% ($39.51) ($50.00)
36% ($49.54)
40% ($58.60) ($100.00)
44% ($66.82) Discount rate

29
5-29
} You start with the same cash flows as you did for the
NPV.
} You use the IRR function:
◦ You first enter your range of cash flows, beginning with the
initial cash flow.
◦ You can enter a guess, but it is not necessary.
◦ The default format is a whole percent—you will normally
want to increase the decimal places to at least two.

5-30
} Multiple IRRs
} Are We Borrowing or Lending?
} The Scale Problem
} The Timing Problem

5-31
} Independent projects: accepting or rejecting one
project does not affect the decision of the other
projects.
◦ Must exceed a MINIMUM acceptance criteria
} Mutually exclusive projects: only ONE of several
potential projects can be chosen, e.g., acquiring an
accounting system.
◦ RANK all alternatives, and select the best one.

5-32
There are two IRRs for this project:
$200 $800
Which one should
we use?
0 i 1 2 ii 3
-$200 - $800
NPV
$100.00
100% = IRR2
$50.00
$0.00
-50% 0% 50% 100% 150% 200%
($50.00) Discount rate
0% = IRR1
($100.00)

5-33
} Calculate the net present value of all cash outflows
using the borrowing rate.
} Calculate the net future value of all cash inflows
using the investing rate.
} Find the rate of return that equates these values.
} Benefits: single answer and specific rates for
borrowing and reinvestment

5-34
} Three different approaches:
◦ Reinvestment approach
◦ Discounting approach
◦ Mixed approach (we will use this for our
study)

5-35
Black Crystal Corporation is a successful mineral
mining firm. As a financial manager of the firm, you
are contemplating a new mining project that has the
following cash flow with a 10% required rate of
return:
a) The initial capital outlay for the project is
$1,000,000.
b) The annual net cash inflows for the next six years
are $550,000.
c) In the seventh year, the firm will incur a cash
outflow of $2,500,000 due to the costs of
cleaning up and filling the excavated holes.

5-36
Step 1: Calculate the FV for year 1 to year 6.
Step 2: Add all the FVs from year 1 to year 6 into year 7
Year Cash Flow ($) Future Value Cash Modified Cash Flow
Flow ($) ($)
0 -1,000,000 -1,000,000.00 -1,000,000
1 550,000 974,358.55 0
2 550,000 885,780.50 0
3 550,000 805,255.00 0
4 550,000 732,050.00 0
5 550,000 665,500.00 0
6 550,000 605,000.00 0
7 -2,500,000 -2,500,000.00 2,167,944.05
IRR 11.69%

5-37
Step 1: Discount only the negative cash flows in year 7 to the present.
Step 2: Move the PV of year 7 to the initial capital investment outlay in year 0.
Step 3: Cash flow for year 1 to year 6 remain unchanged.
Year Cash Flow ($) Present Value Cash Flow Modified Cash Flow
($) ($)
0 -1,000,000 -1,000,000.00 -2,282,895.30
1 550,000 550,000 550,000
2 550,000 550,000 550,000
3 550,000 550,000 550,000
4 550,000 550,000 550,000
5 550,000 550,000 550,000
6 550,000 550,000 550,000
7 -2,500,000 -1,282,895.30 0
IRR 11.66%

5-38
Step 1: Calculate the FV for year 1 to year 6.
Step 2: Discount only the negative cash flows in year 7 to the present.
Step 3: Move the PV of year 7 to the initial capital investment outlay in year 0.
Step 4: Add all the FVs from year 1 to year 6 into year 7
Year Cash Flow ($) Future Value / Present Modified Cash Flow
Value Cash Flow ($) ($)
0 -1,000,000 -1,000,000.00 -2,282,895.30
1 550,000 974,358.55 0
2 550,000 885,780.50 0
3 550,000 805,255.00 0
4 550,000 732,050.00 0
5 550,000 665,500.00 0
6 550,000 605,000.00 0
7 -2,500,000 -1,282,895.30 4,667,944.05
IRR 10.76%
5-39
Would you rather make 100% or 50% on your
investments?
What if the 100% return is on a $1 investment, while
the 50% return is on a $1,000 investment?

5-40
$10,000 $1,000 $1,000
Project A
0 1 2 3
–$10,000
$1,000 $1,000 $12,000

Project B
0 1 2 3
–$10,000

5-41
$5,000.00 Project A
$4,000.00 Project B
$3,000.00
$2,000.00
10.55% = crossover rate
$1,000.00
NPV
$0.00
($1,000.00) 0% 10% 20% 30% 40%
($2,000.00)
($3,000.00)
($4,000.00)
12.94% = IRRB 16.04% = IRRA
($5,000.00)
Discount rate

5-42
Compute the IRR for either project “A-B” or “B-A”
Year Project A Project B Project A-B Project B-A
0 ($10,000) ($10,000) $0 $0
1 $10,000 $1,000 $9,000 ($9,000.00)
2 $1,000 $1,000 $0 $0
3 $1,000 $12,000 ($11,000.00) $11,000
$3,000.00
$2,000.00
10.55% = IRR
$1,000.00
A-B
NPV
$0.00
B-A
($1,000.00) 0% 5% 10% 15% 20%
($2,000.00)
($3,000.00)
Discount rate

43
5-43
Calculate the NPV and IRR for both projects. The discount rate is 8%.
Which project should you choose to invest? What should you do if NPV
and IRR indicate contradicting decision? Please justify your final
decision.
0 -5,000 -5,000
1 1,000 2,500
2 1,000 2,500
3 1,500 2,000
4 2,000 1,000
5 4,000 500

5-44
Year Project A Project B Differential cash
flows:
Cash flow A – Cash
flow B
0 -5,000 -5,000 0
1 1,000 2,500 -1,500 Crossover rate 8.51%
2 1,000 2,500 -1,500
3 1,500 2,000 -500
4 2,000 1,000 1,000 0

19.77% 27.38% Project B
5 4,000 500 3,500
NPV 2,166.41 2,121.15
IRR 19.77% 27.38% Select Select project B

project
Decision Project A if Project B if A Project A
using NPV using IRR
Crossover 8.51%
Rate

5-45
Discount Rate NPV for Project A NPV for Project B
0% 4,500.00 3,500.00
2% 3,825.66 3,115.26
4% 3,216.91 2,759.00
6% 2,666.04 2,428.44
8% 2,166.41 2,121.15
10% 1,712.22 1,834.95
12% 1,298.46 1,567.92
14% 920.75 1,318.36
16% 575.25 1,084.74
18% 258.60 865.71
Final Decision Project A if required Project B if required
rate of return less rate of return more
than 8.51% than 8.51%

5-46
} NPV and IRR will generally give the same decision.
} Exceptions:
◦ Nonconventional cash flows—cash flow signs change more
than once
◦ Mutually exclusive projects
Initial investments are substantially different
Timing of cash flows is substantially different

5-47
PV of cash flows subsequent to initial investment
PI =
Initial investment
◦ Accept if PI > 1
} Ranking Criteria:
◦ Select alternative with highest PI

5-48
} Disadvantages:
◦ Problems with mutually exclusive investments
} Advantages:
◦ May be useful when available investment funds are limited
◦ Easy to understand and communicate
◦ Correct decision when evaluating independent projects

5-49
} Calculate the PI for project A and B.
Cash Flow Present Cash Flow Present

Value Value
0 -10,000 -10,000 -10,000 -10,000
1 5,000 4,545.45 1,000 909.09
2 4,000 3,305.79 3,000 2,479.34
3 3,000 2,253.94 4,000 3,005.26
4 1,000 683.01 6,000 4,098.08
PI 10,788.19 10,491.77
10,000 10,000
= 1.079 = 1.049

5-50
} Varies by industry:
◦ Some firms may use payback, while others choose an
alternative approach.
} The most frequently used technique for large

corporations is either IRR or NPV.

5-51
Compute the IRR, NPV, PI, and payback period for the
following two projects. Assume the required return is
10%.
0 -$200 -$150
1 $200 $50
2 $800 $100
3 -$800 $150

5-52
Project A Project B
CF0 -$200.00 -$150.00
PV0 of CF1 $181.818 $45.455
PV0 of CF2. $661.157 $82.644
PV0 of CF3 -$601.052 $112.697
NPV = $41.92 $90.80

IRR = 0%, 100% 36.19%
PI = 1.2096 1.6053

5-53
Payback Period:
Project A Project B
Time CF Cum. CF CF Cum.CF
0 -200 -200 -150 -150
1 200 0 50 -100
2 800 800 100 0
3 -800 0 150 150
Payback period for project B = 2 years.

Payback period for project A = 1 or 3 years?

5-54
Discount rate NPV for A NPV for B
-10% -87.52 234.77
0% 0.00 150.00
20% 59.26 47.92
40% 59.48 -8.60
60% 42.19 -43.07
80% 20.85 -65.64
100% 0.00 -81.25
120% -18.93 -92.52

5-55
$400
NPV
$300
IRR 1(A) IRR (B) IRR 2(A)
$200
$100
$0
-15% 0% 15% 30% 45% 70% 100% 130% 160% 190%
($100)
($200)
Project A
Discount rates
Crossover Rate Project B

5-56
} Net present value
◦ Difference between market value and cost
◦ Accept the project if the NPV is positive
◦ Has no serious problems
◦ Preferred decision criterion
} Internal rate of return
◦ Discount rate that makes NPV = 0
◦ Take the project if the IRR is greater than the required return
◦ Same decision as NPV with conventional cash flows
◦ IRR is unreliable with nonconventional cash flows or mutually exclusive
projects
} Profitability Index
◦ Benefit-cost ratio
◦ Take investment if PI > 1
◦ Cannot be used to rank mutually exclusive projects
◦ May be used to rank projects in the presence of capital rationing

5-57
} Payback period
◦ Length of time until initial investment is recovered
◦ Take the project if it pays back in some specified period
◦ Does not account for time value of money, and there is an
arbitrary cutoff period
} Discounted payback period
◦ Length of time until initial investment is recovered on a
discounted basis
◦ Take the project if it pays back in some specified period
◦ There is an arbitrary cutoff period

5-58
} Consider an investment that costs $100,000 and has a
cash inflow of $25,000 every year for 5 years. The
required return is 9%, and payback cutoff is 4 years.
◦ What is the payback period?
◦ What is the discounted payback period?
◦ What is the NPV?
◦ What is the IRR?
◦ Should we accept the project?
} What method should be the primary decision rule?
} When is the IRR rule unreliable?

5-59
Cash flow Cummulative CF PV Cummulative PV
Year 0 -$100,000 -$100,000 -$100,000 -$100,000
Year 1 $25,000 -$75,000 $22,935.78 -$77,064.22
Year 2 $25,000 -$50,000 $21,042.00 -$56,022.22
Year 3 $25,000 -$25,000 $19,304.59 -$36,717.63
Year 4 $25,000 0 $17,710.63 -$19,007.00
Year 5 $25,000 $25,000 $16,248.28 -$2,758.72
Payment period = 4 years

Discounted payment period = more than 5 years
NPV = -2,758.72
IRR = 7.93%
We should not accept the project if based on discounted payment method, NPV and
IRR because discounted payment period more than 4 years, NPV < 0 and IRR <
Required rate of return 9%.
NPV and IRR should be the primary decisions rule (explain the advantages of both
methods and disadvantages of payback period)
When is the IRR rule unreliable? (can find the answers in the textbook)
5-60

6.lesson 3 - Net Present Value and Other Investment Rules

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

6.lesson 3 - Net Present Value and Other Investment Rules

Uploaded by

Copyright:

Available Formats

Net Present Value and Other Investment Rules

By Dr. Chin, Phaik Nie

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Required rate of return is 12%

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

NPV 788.19 491.77

a) If Yordone requires a return of 11 percent on such undertakings,

b) The company is somewhat unsure about the assumption of a growth

Copyright © 2019 USM. All rights reserved.

NPV > 0, so accept the project.

@FC: Press CF 2ND CE/E to clear previous memory

Copyright © 2019 USM. All rights reserved.

NPV = 0 if break even.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Cash Flow Cumulative Cash Flow Cumulative

1 5,000 -5,000 1,000 -9,000

2 4,000 -1,000 3,000 -6,000

3 3,000 2,000 4,000 -2,000

4 1,000 3,000 6,000 4,000

Copyright © 2019 USM. All rights reserved.

Year Project A Project B

Copyright © 2019 USM. All rights reserved.

Cash Flow Cumulative Cash Flow Cumulative

1 9,500 -5,500 10,500 -7,500

2 6,000 500 7,000 -500

3 2,400 2,900 6,000 5,500

Project A should be selected.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Year Cash outflow/inflow ($)

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 USM. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

$1,000 $1,000 $12,000

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.

Copyright © 2019 McGraw-Hill Education. All rights reserved.