6104MECH and 6365ELE Industrial Management Question B.3 a) The following information is available in relation to two projects Year Project A (5,000) 2.500 1.000 1,000 500 1,500 1,000 Project B (8.000) 1.500 2.000 2.500 1.000 1,000 2.500 Calculate the payback period for the above-proposed projects and their Net Present Value (NPV) assuming that the organisation has proposed a discounting rate of 12%. Analyse the results and provide conclusions, Payback period and calculations [6 marks) Net present value and calculations [6 marks) Analysis of results and conclusions [3 marks] b) Find the Internal Rates of Return (IRR) of project A in part (a) above. Analyse the outcome if IRR is used, IRR calculations [7 marks] Analysis of the outcome [3 marks] January 2019 Page 7 of 9 6104MECH and 6365ELE Industrial Management Additional Material PRESENT VALUE TABLE 0926 09620952 0.9430925 0907 01951 0890 0873 O2 0.586 0855 0523 784 0745 0.792 0.747 0705 0763 0713 D665 0.735 0681 0530 0708 683 0 6500621 595 0790 0627 0.592 0.558 0.527 0497 0.469 0853 789 0.731 0 577 0.914 0 837 0.7560.703 0 545 0.905 0.820 0.744 0.676 0614 0.896 0.804 0.722 0.650 0.585 0887 0.788 0.701 0.625 557 0.879 0.773 0.681 0.601 0530 0.870 0.758 0.661 0.577 0861 0743 0642 0555 0 481 0.853 0.726 0.623 0.534 0.458 0844 0714 060505130436 0.836 0.700 0.587 0.494 0.416 0.828 0.686 0.570 0.4750 396 10.820 0.673 0.5540.456 0.377 0582 0540 0544 0.508 0422 0386 0.475 0.429 0.358 0.350 04440 397 0356 0319 0415 0.3600325 290 0263 0 362 0315 0 275 0239 0339 0.292 0.252 0218 0317 0270 0231 198 206 0.250 0.212 0.180 0 277 0232 0 1940 164 02580215 0.178 0.149 0417 0.394 0 371 0.350 0.331 0.312 0 Periods 16% 0362 0743 17% 0855 0731 0 547 0718 0.840 0705 07833 0694 194 11% 12% 13% 14% 15% 0.001 0.6936 .885 0877 870 0.756 0.731 0.650 0.636 0.572 0.593 0.587 0.543 0519 0.535 0.507 0.480 0.456 0.482 0.452 0.425 0.400 0.376 0.434 0.404 0.376 0351 0327 0.391 0.361 0.333 0.308 0284 0.352 0.322 0.296 0270 0.247 0317 0287 0.261 0237 0.215 0.257 0231 0208 0.187 0229 0.204 0.182 0163 0232 02050 181 0150 0.141 02090 183 1800 1400123 0.188 0163 0.141 0.123 0107 0.170 0.148 0.125 0.108 0.093 0.153 0 130011100950081 0.138 0.116 0098 0083 0070 10.124 104 087 073 0.061 0552 0.534 0.478 0419 04100390 0370 0352 0.354 0.333 0.3140 296 03050285 0266 0249 0243 0225 0209 0.208 0191 0.176 0 195 0178 0162 0.148 0168 0.152 0.137 Q145 0 130 0116 0104 0.125 0.111 0 099 0088 O 108 0.095 084079 093 001 071 052 01080 0890059 0 051 0044 080009100430037 051 00430037 0031 112 0054 0038 091 0025 January 2019 Page 9 of 9
