ACC544 Capital Budgeting Case Name Student Number Assume 10.0% Cost of Capital Project A Project B Project C Project D Project Cost (300,000) (700,000) (800,000) (500,000) Yr1 after tax cashflow 51,750 410,603 80,445 247,369 Yr2 after tax cashflow 55,551 304,240 154,326 224,952 Yr3 after tax cashflow 87,639 134,860 230,426 91,206 Yr4 after tax cashflow 156,449 27,050 335,065 42,109 Yr5 after tax cashflow 125,998 4,085 301,538 21,286 Total after tax cashflows 477,387 880,838 1,101,800 626,922 Total 5yr After tax earnings (input) 177,387 180,838 301,800 126,922 Payback (input) 3.67 1.95 4.00 2.30 Internal Rate of Return (IRR) 14.62% 14.34% 9.59% 12.47% Net Present Value (NPV) $ 43,891.47 $ 47,047.76 $ (10,118.29) $ 21,294.02 Profitability Index (PI) 1.15 1.07 0.99 1.04 Analysis: IRR- Project A would be recommended due to the fact it brings the highest rate of return. However you c NPV- Project B would thought to be recommended due to the fact that it produces the most amount of m PI- Project A would be recommended due to the fact it has the highest profibility index. Payback method- Project B would be recommended due to the fact it's the quickest to pay back After Tax earnings method- Project A and D would be recommend because it yields the greatest after ta