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COMPLETE THE GIVEN PROBLEM BELOW USING THE EXAMPLES CAPITAL BUDGET (PROJECT ANALYSIS & SELECTON) METHOD PROJECT A PROJECT B Initial Investment -40,000 55000 Year 1 (Projected 12500 Income -Cash Flow) 15000 Year 2 (Projected 12500 16000 Income -Cash Flow) Year 3 (Projected Income -Cash Flow) 12500 20000 Year 4 (Projected 12500 Income -Cash Flow) 25000 Year 5 (Projected 12500 Income -Cash Flow) 30000 Expected Cost of Capital [Required Rate of 12% 12% Return)EXAMPLE 2 CAPITAL BUDGET (PROJECT ANALYSIS & SELECTON) METHOD PROJECT A PROJECT B Initial Investment -30,000 -35000 Year 1 (Projected 9000 Income -Cash Flow) Year 2 (Projected Income -Cash Flow) Year 3 (Projected Income - Cash Flow) Year 4 (Projected Income -Cash Flow) Year 5 (Projected Income -Cash Flow) Expected Cost of Capital [Required Rate of Return) PROJECT A PROJECT B First 3 (Three] Methods) NPV, IRR, MIRR First 3 (Three] Methods NPV, IRR, MIRR OF PROJECT A OF PROJECT B Initial Cost (Investment) 0 Initial Cost (Investment) 0 Cashfow (Income) Year 1 Cashfow (Income) Year 1 Cashfow (Income) Year 2 Cashfow (Income) Year 2 Cashfow (Income) Year 3 Cashfow (Income) Year 3Cashfow [Income) Year 1 Cashfow [Income] Year 1 Cashfow (Income Year 2 Cashfow [Income) Year 2 Cashfow [Income) Year 3 Cashfow [Income] Year 3 Cashfow [Income) Year 4 Cashfow [Income Year 4 Cashfow [Income] Year 5 Cashfow [Income] Year 5 FIRST METHOD - NPV 0.00 FIRST HETHO NPV 0.00 SECOND METHOD - IRR #NUM! SECOND HET IRF #NUM! THIRD METHOD - MIRR #DIV/0! THIRD HETHO MIRR #DIV/0! 4th Method PROFITABILITY INDEX (PI) 4th Method PROFITABILITY INDEX [PI) OF PROJECT A OF PROJECT B Step 1 PV OF Cash Flows Step 1 OF Cash Flows Year 1 Year 1 Year 2 Year 2 Year 3 Year 3 Year 4 Year 4 Year 5 Year 5 PV of Cash Flow! 50.00 PV of Cash Flo 50.00 Step 2 PL= Present Value of the cash flows Step 2 PL= Present Value of the cash flows Initial Cost Initial Cost 000/000 OOO / 000 PI INDEX OF PROJECT A #DIV/0! PI INDEX OF PROJECT B $0.000 5th Method PAYBACK PERIOD 5th Method PAYBACK PERIOD Initial Cost (Investment] 0 D.00 Initial Cost (Inves 0.00 Cashfow [Income) 0.00 Cashfow [Income) 1 0.00 0.00 Cashfow [Income) 0.00 Cashfow [Income) 21 0.00 0.00 Cashfow [Income) 0.00 Cashfow [Income) 3 0.00 0.00 Cashfow [Income) 0.00 Cashfow [Income) 0.00 Cashfow [Income) 5 0.00 Cashfow [Income) 0.00 Payback Period - Method 0000 /00 [Since Un Even Cash flow) #DIV/O! Years [Since Even Cash flow) #DIV/O! Years Step by StepCAPITAL BUDGET (PROJECT ANALYSIS & SELECTON) METHOD PROJECT A PROJECT B Initial Investment -20.00 25000 Year 1 [Projected 5800 4000 Income - Cash Flowi EXAMPLE 1 Year 2 [ Projected 5800 4000 Income - Cash Flowj Year 3 [ Projected 5800 8000 Income - Cash Flowi Year 4 [Projected 5800 10000 Income - Cash Flow Year 5 [ Projected 5800 10000 Income - Cash Flow) Expected Cost of Capital (Required 10% 10% Rate of Returnl PROJECT A PROJECT B First 3 (Three] Methods] NPV, IRR, MIRR First 3 (Three] Methods] NPV, IRR, MIRR OF PROJECT A OF PROJECT B Initial Cost (Investment) 0 20000.00 Initial Cost (Investment) -25000.00 Cashfow [Income Year 1 6800.00 Cashfow [Income) Year 1 4000.00 Cashfow (Income Year 2 5800.00 Cashfow [Income] Year 2 1000.00 Cashfow [Income) Year 3 5800.00 Cashfow [Income) Year 3 8000.00 Cashfow [Income) Year 4 5800.00 Cashfow [Income Year 4 10000.00 Cashfow [Income! Year 5 5800.00 Cashfow [Income) Year 5 10000.00 FIRST METHOD - VPV 1986.56 FIRST HETHO NPV 392.01 SECOND METHOD - RR 13.82% SECOND HET RR 11.30% THIRD HETHOD - MIRR 12.109% THIRD HETHO MIRR 10.8696 4th Method PROFITABILITY INDEX [PI) 4th Metho PROFITABILITY INDEX (PI) OF PROJECT A OF PROJECT B Step 1 PV OF Cash Flows Step 1 PV OF Cash Flows Year 1 5200.00 Year 1 4000.004th Method PROFITABILITY INDEX [PI) 4th Metho PROFITABILITY INDEX (PI) OF PROJECT A OF PROJECT B Step 1 PV OF Cash Flows Step 1 PV OF Cash Flows Year 1 5800.00 Year 1 4000.00 Year 2 5800.00 Year 2 4000.00 Year 3 5800.00 Year 3 2000.00 Year 4 5800.00 Year 4 10000.00 Year 5 5800.00 Year 5 10000.00 PV of Cash Flow: #HUNNNNNN# PV of Cash Flows $25,992.01 Step 2 PL= Present Value of the cash flows Step 2 PL= Present Value of the cash flows Initial Cost Initial Cost 21986.56/20000 25992.01 / 25000 PI INDEX OF PROJECT A 1.099 PI INDEX OF PROJECT B $1.040 5th Method PAYBACK PERIOD 5th Method PAYBACK PERIOD Initial Cost (Investment) 0 -20000.00 Initial Cost (Investm 0 -25000.00 Cashfow [Income) 1 5800.00 Cashfow [Income) 4000.00 -21000.00 Cashfow [Income) 2 5800.00 Cashfow [Income) 2 4000.00 -17000.00 Cashfow [Income) 5800.00 Cashfow [Income) 3 8000.00 -9000.00 Cashfow [Income) 5800.00 Cashfow [Income) 10000.00 Cashfow [Income) 5800.00 Cashfow [Income) 5 10000.00 Payback Period - Method 20000/5800 [Since Un Even Cash flow) 3.9 Years [Since Even Cash flow) 3.4 Years Step by Step