A B E F 1 Investment Decision Spreadsheet 2 3 Discount Rate 4 Project: 1 5 Initial cost: -5000 12% 2 3 4 5 6 5 -5000 -5000 -5000 -5000 -5000 6 Year 1 7 0 2500 -550 670 625 700 900 8 2 0 1700 -50 670 625 9 3 0 915 900 60 670 625 10 4 0 920 450 670 625 700 500 11 5 0 925 800 670 625 12 6 0 930 670 625 300 200 13 7 0 940 670 625 14 8 0 950 150 625 670 670 15 9 0 960 1100 1350 1500 1625 1725 1810 1885 100 625 16 10 0 970 60 625 670 670 17 11 0 980 30 625 625 670 670 1935 625 670 625 1975 2000 670 5625 4 5 6 18 12 0 990 20 19 13 0 1000 10 20 14 0 1100 5 21 15 22000 -5000 5 22 Calculate for 1 2 3 23 Each Project: 24 NPV (at 12%) 25 26 IRR 27 28 MIRR (at 12%) 29 30 PI (at 12%) 31 Profitability Index = NPY/(absolute value of Initial Investment) 32 33 34 Crossover point calculation: 35 36 37 Project Rankings: 38 39 NPV Rankings 40 IRR Rankings 41 MIRR Rankings 42 Profitability Rankings 43 44 45 Why are there differences in ranking these projects? 46