1. Understand how to use Excel spreadsheet Net Income c Add back Depreciation $60,000 Total Operating Cash Flow $75,800 Terminal: 1) Salvage value (after tax) Salvage Value Before Tax (1-T) Total \begin{tabular}{l|l|} \hline$ & 11,850 \\ \hline$ & 11,850 \end{tabular} Project Net Cash Flows (240,000)$ 75,800$ IRR=42.5% Payback = ? NPV=[$162.997) Q\#1 Would you accept the project based on NPV, IRR? Would you accept the project based on Payback rule if project cut-off is 3 years? Q\#2 How would you explain to your CEO what NPV means? Q\#3 What are advantages and disadvantages of using only Payback method? QH4 What are advantages and disadvantages of using NPV versus IRR? QA5 Explain the difference between independent projects and mutually exclusive projects. When you are confronted with Mutually Exclusive Projects and have coflicts with NPV and IRR results, which criterion would you use (NPV or IRR) and why? 1. Understand how to use Excel spreadsheet Net Income c Add back Depreciation $60,000 Total Operating Cash Flow $75,800 Terminal: 1) Salvage value (after tax) Salvage Value Before Tax (1-T) Total \begin{tabular}{l|l|} \hline$ & 11,850 \\ \hline$ & 11,850 \end{tabular} Project Net Cash Flows (240,000)$ 75,800$ IRR=42.5% Payback = ? NPV=[$162.997) Q\#1 Would you accept the project based on NPV, IRR? Would you accept the project based on Payback rule if project cut-off is 3 years? Q\#2 How would you explain to your CEO what NPV means? Q\#3 What are advantages and disadvantages of using only Payback method? QH4 What are advantages and disadvantages of using NPV versus IRR? QA5 Explain the difference between independent projects and mutually exclusive projects. When you are confronted with Mutually Exclusive Projects and have coflicts with NPV and IRR results, which criterion would you use (NPV or IRR) and why