Hello, like you can you see it. I just got an answer from some friends in the 2 last pictures but I really don't like the way they did. So please do it differently and will give you a like+comments
In part c) I think the TIR is the internal rate of return
The table below describes the net cash flows of two mutually exclusive projects proposed to Dfie Ltd. Year Project 1 Project 2 0 -3 600 $ - 6 300 $ 1 1 800 3 000 2 1650 2 700 3 1 350 2 400 a. Based on the payback criterion, which project should be selected? b. Assume that there are no corporate taxes and that the cash flows are earnings before depreciation The company uses the straight-line method of depreciation. Using the book average return criterion which project is better? c. Which project has the highest TIR? li Bi e Hero - Microsoft Excel o Home Insert Page Layout Formulas Data Review View Autasum Calibri - 10 Copy Paste Format Painter BIU. Clipboard Font AA === Wrap Tout Goneral Normal A Merge & Center 49%. Conditional Format Good Formatting as Table Alignment Number Styles Bad Neutral = Insert Delete Format 2 Cles Sort & Find & Filter Select Editing Calis Security Warning Automatk update of links has been disabled Options. L M K14 A B C D D E F F G H | J K 1 Answer 2 Periud Larning Belure Dep.1 Earning Before Dep.2 Annual Dep 1 Annual Dep 2 Bouk Peolit 1 Bouk Prolit 2 2 Answer 3 1 1800 3000 1200 2100 600 900 Period Cash flows 1 Cash flows 7 4 2 1650 2700 1200 2100 150 600 0 -3600 -6300 5 3 13501 2400 1200 2100 150 300 1 1800 3000 6 Avg. Bonk Profit 400 600 2 1650 2700 7 Book Profit - Earning Before Dep. - Annual Dep Initail Investment 3600 6300 3 1350 2400 8 Annual Dep. = Cost Of Assets / Life Book Avg. Return 11.11% 9.52% % TIR 16.761% 14.286% 9 Rrok Avg Return - Avg Rook Profit/ Initail Investment )*100 Project 1 is better as it has high Rank Avg. Return Project 1 has highest TR. 10 11 Answer Answer 12 Pay Back Period Pay Back Period 13 initial Outflows -3,600 Initial Outflows -6,300 14 PV of Inflow Cumulative py of Inflow Cumulative 15 0 0.0 0 0 0.0 16 1 1800 1800 1 3000 3000 17 2 2 1650 3450 2 2 2700 5700 18 3 1.750 ARDO 3 7400 8100 19 Low Year High Year Low Year High Year Select project 1 as it has low pay back period 20 2 3 1 2 21 Arnt Rrovered PV At Year High Yes Amt flexwed PV At Year High Year 22 3450 1350 3000 2700 23 Payback Period 1 2.11 Payback Period 2 2.22 24 HENSheet47 Sheet16 Sheet18 Sheet19 Sheet50 Sheet51 Sheet52 Sheet53 Sheet54 Sheet55 2 Ready 100% ENG IN 12:39 27-11-2021 a X HOOD XE Hero - Microsoft Excel Home Insert Page Layout Formules Data Heview View Define Name Trace Precedents Slow Formulas Calculate Now GPUs in Formula - Trace Dependents Error Checking Insert AutoSum Recently Financial Logical Text Date & Lookup & Math & More Name Create Irom Selection Remove Arrows-Evaluate Formula Window Options Watch Calculation skulle Steel Function Used Time Reference Trig' functions Manager Function Library Defined Names Formula Auditing Calculation fic 2 - Security Warning Automatk update of links has been disabled Options. 113 f K L Cash flow 2 -6300 3000 2700 2400 =IRR(K4:K7 A B D E F G H j 1 Answer A 2 Periud Earring Belore Dep.1 Earning Before Dep.2 Annual Dep 1 Annual Dep 2 Buuk Prufil Buuk Pruit 2 Answer 31 1800 2000 -3600/3 -6300/3 -A D3 -C3-F3 Period Cash flows 1 42 1650 2700 -3600/3 -6300/3 -11-01 1-C11-E1 10 -3600 53 1350 2400 =3600/3 -6300/3 =85-DS CS-LS 1 1H00 6 Avg Rack Profit -AVERAGF|F3:F5) - AVERAGF|GI:65) 12 1650 7. Book Profit - Earning Initail Investment 3600 6300 3 3 1350 8 Annual Dep. = Cost Book Avs. Return =F6/F7 -G6/G7 TIR =IRR 14:17) 9 Ronk Avg. Return - A Project 1 is better a Project 1 has highest TIR. 10 11 Answer B Answers 12 Pay Back Period Pay Back Period 13 Initial Outflows -J4 Initial Outlows I-K4 14 Pv of Inflow Cumulative py of Inflow Cumulative 15 0 0 0 -C15 10 o -G15 16 1 1800 -D15 C16 1 1 3000 -H15 G16 17 2 1650 =D16+017 2 2700 =H16+61/ 18 3 1350 -117-CIR 21 2400 -H17-GIR 19 Low Year High Year Low Year High Year Select proje 20 2 3 1 2 21 Amt Rcxwed PV At Year Iligh Year Arnt Roxynod PV At Year High Yes 22 -D17 -C18 -H16 -G17 23 Payback period 1 -B20-ff-C13-B22)/C22) Payback Period 2-F20+{-G13-F22)/G22) 24 HN Sheet17 Sheet16 Sheet18 Sheet19 Sheet50 Sheet51 Sheet52 Sheet53 Sheet54 Sheet55 Fendy 100% 12:40 27.11 2021 HO ENG IN
