Given Information		Mumbai			Given Information			Bangalore
	Initial cash outlay		$ 5,000,000			Initial cash outlay			$ 2,800,000
	Useful life		20			Useful life			20
	Operating income		1,100,000			Operating income			860,000
	The cost of capital		9%			The cost of capital			9%
	Tax rate		40%			Tax rate			40%
	Mumbai net cash flow		Net Income	Cash Flow		Bangalore net cash flow		Net Income	Cash Flow
	Operating income		$ 1,100,000	$ 1,100,000		Operating income		$ 860,000	$ 860,000
	Depreciation		850,000			Depreciation		720,000
	Net Income before taxes		250,000			Net Income before taxes		140,000
	Tax, 40%		100,000	100,000		Tax, 40%		56,000	56,000
	Net Income		$ 150,000			Net Income		$ 84,000
	Net cash flow			$ 1,000,000		Net cash flow			$ 804,000
	Average net income and average book value of investment					Average net income and average book value of investment
		Year	Net Income	Avg BV of Investment			Year	Net Income	Avg BV of Investment
		1	$ 150,000				1	84,000
		2	150,000				2	84,000
		3	150,000				3	84,000
		4	150,000				4	84,000
		5	150,000				5	84,000
		6	150,000				6	84,000
		7	150,000				7	84,000
		8	150,000				8	84,000
		9	150,000				9	84,000
		10	150,000				10	84,000
		11	150,000				11	84,000
		12	150,000				12	84,000
		13	150,000				13	84,000
		14	150,000				14	84,000
		15	150,000				15	84,000
		16	150,000				16	84,000
		17	150,000				17	84,000
		18	150,000				18	84,000
		19	150,000				19	84,000
		20	150,000				20	84,000
		Average	$ 150,000				Average	84,000
	Mumbai					Bangalore
a.	Average rate of return on investment				a.	Average rate of return on investment
	ROI= (Average annual income from project/average annual investment in the project)					ROI= Average annual income from project/average annual investment in the project
b.	Payback period				b.	Payback period
	PB= (Cost of the investment/ annual net cash flow)		5.0	years		PB= (Cost of the investment/ annual net cash flow)		3.5	years
c.	Net present value - using table page 126				c.	Net present value - using table page 126
		Amount	Factor	Present value			Amount	Factor	Present value
	Initial investment	$ 5,000,000	1	$ 5,000,000		Initial investment	$ 2,800,000	1	$ 2,800,000
	Annual net cash flow for 20 years	$ 150,000	9.129	1,369,350		Annual net cash flow for 20 years	$ 84,000	9.129	766,836
	Net present value			$ 6,369,350		Net present value			$ 3,566,836
	Using MS Excel:					Using MS Excel:
	Initial investment			$ 5,000,000		Initial investment			$ 2,800,000
	PV of Annual net cash flow for 20 years			6,369,350		PV of Annual net cash flow for 20 years			3,566,836
	Net present value			$ 11,369,350		Net present value			$ 6,366,836
d.	Internal rate of return				e.	Internal rate of return
	Using MS Excel:					Using MS Excel:		#NUM!
Period					Period
0					0
1					1
2					2
3					3
4					4
5					5
6					6
7					7
8					8
9					9
10					10
11					11
12					12
13					13
14					14
15					15
16					16
17					17
18					18
19					19
20					20

THIS IS WHAT I DID SO FAR. PLEASE HELP ME WITH PARTS THAT ARE LEFT BLANK. AND MAKE CORRECTIONS AS NEEDED