Question
I need help calculating Nominal Payback, Discounted Payback, Net Present Value and Internal Rate of Return. The equipment cost is $500,000 and an additional net
I need help calculating Nominal Payback, Discounted Payback, Net Present Value and Internal Rate of Return. The equipment cost is $500,000 and an additional net working capital of $25,000 is needed. There is a cash flow savings of 20% or $175,000. I have access to a credit line and could borrow the funds at a rate of 6%. Termination value of the equipment after 5 years is projected to be $25,000.
There are 5 scenarios I have to graph and show my work for. Can I get help with how to correctly calculate the above information if:
#1: there is a 5 year project life, flat annual savings, and 10% discount rate?
#2: 5 year project life, 10% discount rate, 10% compounded annual savings growth in years 2 and 3?
#3: 5 year project life, flat annual savings, 14% discount rate
#4: 7 year project life, flat annual savings, 10% discount rate, termination value of $15,000
#5: (this one we're only calculating Net Present Value), negotiate a 5% discount off the annual outsourcing costs, lower risk free discount of 7%.
I am not understanding how/ what formulas to use in order to calculate.
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