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  • NPV & Irr

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    Yudha Aditya
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    This document calculates the net present value (NPV) and internal rate of return (IRR) of a project with cash flows of $5.91 million in year 1, $5.9 million in year 2, $5.85 million in year 3, and an initial investment of $7 million. It finds that the NPV is $764,395 using a discount rate of 10% and the NPV is negative $291,288 using a discount rate of 70%. It then calculates the IRR of the project to be 66% using the NPV results at 10% and 70% discount rates.

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    NPV & IRR

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    This document calculates the net present value (NPV) and internal rate of return (IRR) of a project with cash flows of $5.91 million in year 1, $5.9 million in year 2, $5.85 million in year 3, and an initial investment of $7 million. It finds that the NPV is $764,395 using a discount rate of 10% and the NPV is negative $291,288 using a discount rate of 70%. It then calculates the IRR of the project to be 66% using the NPV results at 10% and 70% discount rates.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    2 views1 page

    NPV & Irr

    Uploaded by

    Yudha Aditya
    This document calculates the net present value (NPV) and internal rate of return (IRR) of a project with cash flows of $5.91 million in year 1, $5.9 million in year 2, $5.85 million in year 3, and an initial investment of $7 million. It finds that the NPV is $764,395 using a discount rate of 10% and the NPV is negative $291,288 using a discount rate of 70%. It then calculates the IRR of the project to be 66% using the NPV results at 10% and 70% discount rates.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    NPV

    ( )
    T
    Arus Kas
    NPV =∑ −Investasi Awal
    t=1 ( 1+i )t

    NPV =
    (
    5910000
    ( 1+ 0,1 )
    +
    )(
    5900000
    ( 1+ 0,1 ) 2
    +
    )(
    5850000
    ( 1+0,1 )3)−7000000

    NPV =7643952

    IRR
    NPV =
    (
    5910000
    ( 1+ 0,1 )
    +
    )(
    5900000
    ( 1+ 0,1 ) 2
    +
    )(
    5850000
    ( 1+0,1 )3 )
    −7000000

    NPV =7643952
    NPV =
    (
    5910000
    ( 1+0,7 )
    +
    )(
    5900000
    ( 1+0,7 ) 2
    +
    )(
    5850000
    ( 1+0,7 )3 )
    −7000000

    NPV =−291288

    Tahun Cashflow Discounted Cashflow


    10% 70%
    0 (7000000) (7000000) (7000000)
    1 5910000 5372727 3476471
    2 5900000 4876033 2041522
    3 5850000 4395192 1190719
    Total 7643952 -291288
    MARR=25 %

    NPV 1
    IRR=i1 + ( i2−i1 )
    ( NPV 1−NPV 2 )
    7643952
    IRR=10 %+ ( 70 %−10 % )
    ( 7643952−(−291288 ) )
    IRR=0.66
    IRR=66 %

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