Exercise 1:

A project with total investment capital at the time of starting production and business is
350 billion VND. The project's annual revenue is expected to be 115 billion VND, the
annual operating cost (excluding depreciation and interest) is 25 billion VND, the life of
the project is 15 years, the residual value at the end of the project life is 2 billion VND.
The project's discount rate is 15%/year.
The project was created with:
1. Net present value is 200 billion VND
2. Payback period is 5 years
3. Internal rate of return is 30%
Appraisal the financial indicators reflected in the project file

Exercise 2:
A project with a total investment capital at the time of starting production and business is
350 billion VND. The revenue of the first year of the project is VND 50 billion, the
second year is VND 55 billion, from the third year the revenue of the project is expected
to be stable at VND 95 billion annually until the end of the project life. The annual
operating cost (excluding depreciation and interest) of the project is 15 billion VND. The
life of the project is 15 years. The residual value of the project is 5 billion VND. The
project's discount rate is 13%/year.
The project was created with:
a. Net present value is 100 billion VND
b. The internal rate of return is 20%.
Please re-evaluate the financial indicators reflected in the project file

Exercise 3:
An enterprise is considering an investment project in equipment to improve product
quality. The total investment capital of the project is 17,000 million VND and is
mobilized from 3 sources
- Source 1: borrowed 10,500 million VND - annual term – annual interest rate 12%
- Source 2: borrowed 5,500 million VND - annual term - annual interest rate 14%
- Source 3: borrowed 1,000 million VND - annual term - annual interest rate 13%
If the project is implemented, the expected annual revenue is 11,000 million VND.
Expenses (excluding depreciation and interest) in the first year are expected to be 3,500
million VND, in the second year are 4,000 million VND, then keep stable at 4,500
million VND. If the project life is 15 years and every 5 years it will be overhauled and it
costs 200 million VND for once.
The project was created with
a. Net present income of the project is 30,000 million VND.
b. The internal rate of return is 50%.
Appraise the performance indicators reflected in the project file

Exercise 4
In order to ensure irrigation for agricultural production in commune A, it is expected to
invest in the construction of irrigation works with the following costs:
Initial cost is 12 billion dong, annual maintenance cost is 140 million dong (without
depreciation and interest payment). The life of the work is 30 years, every 15 years the
work must be overhauled for 500 million VND. Thanks to the project, the total income
from farming households increased by 1.4 billion VND annually. Interest rate on loans
for construction is 8%/year.
The project was created with
a. Net present income of the project is 3 billion VND
b. The payback period is 10 years
c. The internal rate of return is 15%.
Review the performance indicators

Exercise 5
To welcome tourists to Quang Ninh every year, the People's Committee of Quang Ninh
Province decided to implement the project "Renovating and building a new tourist and
entertainment area". The project is built with the following costs and revenues:
- It is estimated that the cost of compensation and clearance is about 20 million USD, the
cost of construction and installation and equipment is about 60 million USD, other
investment costs are about 12 million USD.
- Estimated annual revenue is about 50 million USD, the annual cost to generate the
above revenue is estimated at 60% of revenue (in expenses without depreciation and loan
capital).
- The project requires 10 million USD for periodic repair every 15 years of operation.
- The life of project is expected in 30 years. After that, the residual value is 20 million
USD. The interest rate on the capital market is 12%/year.
The project was created with
a. Net present value of the project is 70 million USD
b. The payback period is 8 years
c. The internal rate of return is 25%.
Appraise the performance indicators reflected in the project file

Exercise 6:
An investment project to build a resort called "The Red" intends to raise capital from 2
sources with the expected amount of investment capital to be mobilized as follows:
- Source 1: mobilized 35 billion VND with interest rate of 12%/year.
- Source 2: mobilized 32 billion dong, interest rate 11%/year
The resort will come into operation with expected revenue and expenses as follows:
Annual revenue includes:
- Hotel services: 12 billion VND
- Villa for rent: 20 billion VND
- Other services: 10 billion VND
The first 2 years are expected to reach only 80% of the expected annual revenue. From
the third year, 100% of the expected revenue will be achieved. Annual expenses (without
depreciation and interest) are estimated at 60% of annual revenue. The expected
operation and exploitation period is 30 years. The residual value at the end of the project
life is 20 billion VND.
The project was created with
a. Net present income of the project is 70 billion dong
b. The payback period is 8 years
c. The internal rate of return is 25%.
Please re-evaluate the performance indicators

Exercise 7:
A hotel construction investment project has a total investment capital of 40 billion VND
at the time the project comes into operation. In which, equity capital is 20 billion with the
opportunity cost of using capital is 18%/year, loan capital is 20 billion with interest rate
of 12%/year. The annual revenue of the project is estimated at 24 billion VND. Annual
expenses (excluding depreciation) are 40% of sales. After the project is shut down, the
residual value is 2.5 billion VND. The life of the project is 30 years.
The project was created with
a. Net present value of the project is 60 billion dong
b. Payback period is 5 years
c. Internal rate of return is 45%
Review the performance indicators reflected in the project file

Exercise 8:
An investor has 2500 billion VND and borrows another 5000 billion VND at 12% annual
interest rate to implement the project. The total net profit and depreciation from the
project are as follows:
First year: 950 billion VND
Second year: 980 billion VND
Third year: 1000 billion VND
Fourth year: 1200 billion dong
Then kept at a stable level of 1200 billion VND/year. If the investor does not invest in
this project, he can implement another project with a guaranteed rate of return of 16% per
year. The project life is 30 years.
The project was created with
a. The payback period is 15 years
b. Net present income of the project 1200 (billion VND)
Review the performance indicators reflected in the project file

Exercise 9:
An enterprise borrows capital to implement an investment project as follows:
Investment source Loan amount Term Borrowing interest rate
(million VND) (%/month)

Source 1 400 Year 1.4%

Source 2 650 Quarter 1.2%
Source 3 750 6 months 1.3%

It is expected that at the beginning of the 3rd year (after 2 years) since the loan is
borrowed, the project will start to create revenue. Annual revenue is 750 million VND,
annual operating cost (excluding depreciation and interest) is 200 million VND/year. The
residual value of the project is 30 million VND. With a project life of 12 years. The
project was created with
1. Net present income of the project is 500 million VND
2. Payback period is 6 years
3. Internal rate of return is 25%
Review the performance indicators reflected in the project file

Exercise 10:
An enterprise borrows capital to implement an investment project as follows:

Investment source Loan amount Term Borrowing interest rate

(million VND) (%/month)

Source 1 500 Year 1.1%

Source 2 550 Quarter 0.9%
Source 3 700 6 months 1.0%

It is expected that at the beginning of the 3rd year (after 2 years) since the loan is
borrowed, the project will start to go into production.
Supposed that the annual revenue is 850 million VND and the annual expenses to
generate the above revenue is 250 million VND (excluding depreciation). The remaining
value is expected to be 100 million VND. The project life is 15 years.
The project is established with the project's net present income of VND 2,000 million
Evaluate the performance indicators reflected in the project file

Exercise 11:
An enterprise borrows capital to invest in expand production with the capital
implementation schedule as follows:
Investment year Loan amount Term Borrowing interest rate
(million VND) (%/month)

Year 1 1700 Quarter 1.2%

Year 2 2200 6 months 1.3%
Year 3 2500 Year 1.4%

It is expected that the fourth year after the loan (after 3 years) the project will come into
operation and the revenue of the first year will be 3550 million VND, the second year
will be 3650 million VND, the third year will be 3800 million VND and then stabilized at
3800 million. To generate the above revenue, the annual expenses (excluding
depreciation and interest) are 1050 million VND. The residual value of the project is 200
million VND. The project life is 20 years.
The project was created with
1. Net present value of the project is 10,000 million VND
2. Payback period is 3 years
3. Internal rate of return is 25%
Review the performance indicators reflected in the project file