Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help calculating the internal rate of return (IRR), the profitability index (PI), and the payback period for the spreadsheet below. Can you also

I need help calculating the internal rate of return (IRR), the profitability index (PI), and the payback period for the spreadsheet below. Can you also provide the calculations for these 3 for better understanding? I have included the project synopsis and spreadsheet.

The NPV is $12,249,171

image text in transcribed
A B C D E F G H K 27 28 Project C: Marketing/Advertising campaign 29 Year 1 2 3 4 51 6 30 Sales 23000000 23000000 23000000 23000000 23000000 23000000 31 Cost of Sales 75%% (60+15) -17250000 -17250000 -17250000 -17250000 -17250000 - -17250000 32 Advertisement cost 2000000 -2000000 -2000000 -2000000 2000000 -2000000 33 Profit 3750000 3750000 3750000 3750000 3750000 3750000 34 Tax 937500 -937500 -937500 -937500 -937500 -937500 35 Net Profit 2812500 2812500 2812500 2812500 2812500 2812500 36 Pv factors @ 10% 0.909091 0.826446 0.751315 0.683013 0.620921 0.564474 37 Present Values 2556818 2324380 2113073 1920975 1746341 1587583 38 Present Value 12249171 39 40 A B C D E F G H K 27 28 Project C: Marketing/Advertising campaign 29 Year 1 7 4 5 6 30 Sales -20080000*1.15 =20008000 1 15 =20008080 1 15 =20000080"1 15 =20000000"1 15 =20000000 1.15 31 Cost of Sales 75% (60+15 =-(30*0.75 -D30*0.75 =-E30*0.75 :-F30 0.75 -G30*0.75 :-H3010.75 32 Advertisement coit -200000 2000000 2000000 -2000000 -2000000 200000 33 Profit -SUM(30:032) SUM(D30:032) =SUM(E30:E32) =SUM(F30:F32 =SUM G30:632) =SUM(H30:H32 34 = (33 0.25 -D33 0.25 -E33 0.25 =-F33 0.25 -G33 0.25 -H33 0.25 Net Profit -+33+034 =+033+034 =+F33+F34 -+G33+G34 =+H33+H34 Pvfactors @ 10% =1/1.1 :+036/1.1 =+036/1.1 =+636/1.1 :+F36/1.1 2+G34/1.1 Prevent Values #+(35*036 =4035 036 =4635 636 =4F35*F36 =4G35 G36 =+435 H36 Present Value =+SUM(C37:437)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting IFRS

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

4th Edition

1119607515, 978-1119607519

More Books

Students also viewed these Accounting questions