Question
show detailed working a. Calculate the net present value of each project, and rank the projects Project Friendship Year Cash Flow PVIF 14%(1+i) -n PV
show detailed working
a. Calculate the net present value of each project, and rank the projects
|
| Project Friendship |
| |
| Year | Cash Flow | PVIF 14%(1+i) -n | PV |
| 0 | (105,000) |
|
|
| 1 | 7,000 |
|
|
| 2 | 3,000 |
|
|
| 3 | 6,000 |
|
|
| 4 | 55,000. |
|
|
| 5 | 108,000. |
|
|
| 5 | 50 000 |
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|
|
|
|
|
|
|
| $ Project Amicus |
| |
| Year | Cash Flow | PVIFA 14%(1+i) -n | PV |
| 0 |
|
|
|
| 1-5 |
|
|
|
|
|
|
|
|
PVIFA=PMT [ 1-(1+i)-n] =
i
IRR
|
| Project Friendship |
|
|
| |
| Year | Cash Flow | PVIF 14%(1+i) -n | PV | PVIF 20% | PV |
| 0 | (105,000) | 1 |
| 1 |
|
| 1 | 7,000 |
|
|
|
|
| 2 | 3,000 |
|
|
|
|
| 3 | 6,000 |
|
|
|
|
| 4 | 55,000. |
|
|
|
|
| 5 | 108,000. |
|
|
|
|
| 5 | 50 000 (salvage |
|
|
|
|
|
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| NPV |
|
|
|
A+ B ( C ) Where A= ; B= ; C= ; D=
D
IRR = 1 =
V
V
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College Accounting Chapters 1 24
Authors: Douglas J. Mcquaig, Patricia Bille, Tracie L. Nobles
10th Edition
1439037752, 9781439037751
