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THERE ARE TWO CHOICES OF INVESTMENT OF $50 000 (CASE_1, COMPANYS USES, OWN FUNDS, OR CASE_2, SIMPLE LOAN, THE COMPANY PAYS YEARLY CAPEX EXPENSES AS
THERE ARE TWO CHOICES OF INVESTMENT OF $50 000 (CASE_1, COMPANYS USES, OWN FUNDS, OR CASE_2, SIMPLE LOAN, THE COMPANY PAYS YEARLY CAPEX EXPENSES AS COST). STATE THE ADVANTAGES AND DISADVANTAGES OF EACH CASE; CALCULATE THE IRR AND NPV OF THE INVESTMENT
CASE_1 | CASE_2 | |||||||
EOY | SAVINGS | COST | CASH_FLOW | EOY | SAVINGS | COST | CASH_FLOW | |
0 | 50,000 | -50,000 | 0 | |||||
1 | 20,000 | 20,000 | 1 | 20,000 | 14,000 | 6,000 | ||
2 | 20,000 | 20,000 | 2 | 20,000 | 14,000 | 6,000 | ||
3 | 20,000 | 20,000 | 3 | 20,000 | 14,000 | 6,000 | ||
4 | 20,000 | 20,000 | 4 | 20,000 | 14,000 | 6,000 | ||
5 | 20,000 | 20,000 | 5 | 20,000 | 14,000 | 6,000 | ||
SUM= | 30,000 | |||||||
NPV= | NPV= | |||||||
IRR= | IRR= |
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