Investment Decision Criteria: Problems You are hired as an investment consultant for a start-up company, AAA Inc. AAA plans to invest PhP2 million in equipment for a 5-year investment project. It includes installation and setup costs. However, the company is not 100% certain about it, so they assigned various probabilities to account for risks. Here are the Year 1 sales for each scenario:

Worst (20%) Base (50%) Best (30%) 1,500,000 4,500,000 7,000,000

The gross profit margin across projects life is 45%. The OPEX (all cash, excluding depreciation & amortization) ratio across projects life is 20%. The equipment is being depreciated on a straight line 0 salvage value basis. The growth rate in sales are:

YEAR	WORST 20%	BASE 50%	BEST 30%
2	1%	4%	6%
3	1.5%	6%	9%
4	2%	8%	11%
5	2.5%	9%	14%

The applicable tax rate is 30%. At the end of the projects life, the company can sell the equipment at the following rates:

Worst (20%) Base (50%) Best (30%) 0 (no sale) 150,000 200,000

The discount rate is 11.5%.

Compute for:

NPV?

PI?

IRR?

MIRR?

Payback?

Discounted payback?