6. (Score=10) Consider the following 5-years investment table of Agus's cash flow with required return rate j=10% (RRR). Discounted is a discount factor based on RRR. Contribution is amount of money that Agus paid to start the business (investment). Whereas, Return is amount of money that Agus received from the investment. Furthermore, PV Contrib is present value of Contribution based on RRR, then Net Cash Flow is Return minus Contribution. Moreover, Discounted Cash Flow is present value of Net Cash Flow based on RRR. Finally, NPV at year 4 is NPV of investment from now (t=0) until year 4. Ift=5 then the investment has settled or matured. Year Discounted Contribution Return PV Contrib PV Return Net Cash Flow Discounted Net Cash Flov NPV at year t 0 1 10000 10000,00000 0,00000 -10000 -10000 -10000 1 0,9090909 3000 4000 2727,27273 3636,36364 1000 909,0909091 -9090,909091 2 0,8264463 1000 6000 826,44628 4958,67769 5000 4132,231405 -4958,677686 3 0,7513148 2000 5000 1502,62960 3756,57400 3000 2253,944403 -2704,733283 4 0,6830135 1000 6000 683,01346 4098,08073 5000 3415,067277 710,3339936 5 0,6209213 1000 4000 620,92132 2483,68529 3000 1862,763969 2573,097963 Figure 1: Agus's Cash Flow under RRR=10% (a). Calculate the Profitability Index of this investment under required return rate (RRR). (b). Find the discounted payback period over this investment under required return rate (RRR). (c). From the cash flow of contribution and return, Agus knew that this investment will yield an internal return rate (IRR = 0.078247383413249). Based internal return rate (IRR), what can you conclude from Agus's investment? Please give a comment to analyze this investment. 6. (Score=10) Consider the following 5-years investment table of Agus's cash flow with required return rate j=10% (RRR). Discounted is a discount factor based on RRR. Contribution is amount of money that Agus paid to start the business (investment). Whereas, Return is amount of money that Agus received from the investment. Furthermore, PV Contrib is present value of Contribution based on RRR, then Net Cash Flow is Return minus Contribution. Moreover, Discounted Cash Flow is present value of Net Cash Flow based on RRR. Finally, NPV at year 4 is NPV of investment from now (t=0) until year 4. Ift=5 then the investment has settled or matured. Year Discounted Contribution Return PV Contrib PV Return Net Cash Flow Discounted Net Cash Flov NPV at year t 0 1 10000 10000,00000 0,00000 -10000 -10000 -10000 1 0,9090909 3000 4000 2727,27273 3636,36364 1000 909,0909091 -9090,909091 2 0,8264463 1000 6000 826,44628 4958,67769 5000 4132,231405 -4958,677686 3 0,7513148 2000 5000 1502,62960 3756,57400 3000 2253,944403 -2704,733283 4 0,6830135 1000 6000 683,01346 4098,08073 5000 3415,067277 710,3339936 5 0,6209213 1000 4000 620,92132 2483,68529 3000 1862,763969 2573,097963 Figure 1: Agus's Cash Flow under RRR=10% (a). Calculate the Profitability Index of this investment under required return rate (RRR). (b). Find the discounted payback period over this investment under required return rate (RRR). (c). From the cash flow of contribution and return, Agus knew that this investment will yield an internal return rate (IRR = 0.078247383413249). Based internal return rate (IRR), what can you conclude from Agus's investment? Please give a comment to analyze this investment
