Q. 9. Calculate NPV, IRR, MIRR, PI of Project A & B CAPITAL BUDGET (PROJECT ANALYSIS & SELECTON) METHOD - IN CLASS PRACTICE PROJECT A PROJECT B Initial Investment -21,000 28000 Year 1 (Projected 5900 3500 Income - Cash Flow) Year 2 (Projected 5900 3800 Income - Cash Flow) Year 3 (Projected 5900 7952 Income - Cash Flow) Year 4 (Projected 5900 9968 Income - Cash Flow) Year 5 (Projected 5900 9976 Income - Cash Flow) Expected Cost of Capital (Required Rate of 12% 12% Return)PROJECT A (NPV / IRR / MIRR) Calculations PROJECT B (NPV / IRR / MIRR) Calculations First 3 (Three) Methods) First 3 (Three) Methods) NPV, IRR, MIRR OF PROJECT B Initial Cost (Investment) Initial Cost (Investment) Cashfow (Income Year 1 Cashfow (Income) Year 1 Cashfow (Income) Year 2 Cashfow (Income) Year 2 Cashfow (Income) Year 3 Cashfow (Income) Year 3 Cashfow (Income) Year 4 Cashfow (Income) Year 4 Cashfow (Income) Year 5 Cashfow (Income) Year 5 FIRST METHOD - NPV FIRST METHOD - NPV SECOND METHOD - IRR SECOND METHOD - IRR THIRD METHOD - MIRR THIRD METHOD - MIRR 4th Method PROFITABILITY INDEX (PI) 4th Metho PROFITABILITY INDEX (PI) OF PROJECT A OF PROJECT B Step 1 PV OF Future Cash Flows Step 1 PV OF Future Cash Flows Year 1 Year 1 Year 2 Year 2 Year 3 Year 3 Year 4 Year 4 Year 5 Year 5 PV of Future Cash Flows PV of Future Cash Flows Step 2 PI = Present Value of the future cash flows Step 2 PI = Present Value of the future cash flows Initial Cost Initial Cost PI INDEX OF PROJECT A PI INDEX OF PROJECT B WHICH PROJECT CHOSEN