P11-1. What is the project's NPV? P11-2. What is the project's IRR? P11-3. What is the project's MIRR? P11-4. What is the project's PI? P11-5. What is the project's payback period
P11-1. What is the project's NPV? P11-2. What is the project's IRR? P11-3. What is the project's MIRR? P11-4. What is the project's PI? P11-5. What is the project's payback period
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...
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Question
A project has an initial cost of $52,125, expected net
P11-1. What is the project's
P11-2. What is the project's IRR?
P11-3. What is the project's MIRR?
P11-4. What is the project's PI?
P11-5. What is the project's payback period
Expert Solution
Step 1
As per my view....
Inflows given in question is 12000 , not 1200
So I give solutions assuming 12000 inflow in 8 years
Answer P11-1
Calculation of NPV
NPV = P.V of Cash Inflow - P.V of Cash outflow
P.V of equal cash flow -
Year end | Cash Inflow($) | P.V.F @ 12% | Present value |
1 | 12000 | .893 | 10716 |
2 | 12000 | .797 | 9564 |
3 | 12000 | .712 | 8544 |
4 | 12000 | .636 | 7632 |
5 | 12000 | .567 | 6804 |
6 | 12000 | .507 | 6084 |
7 | 12000 | .452 | 5424 |
8 | 12000 | .404 | 4848 |
Total |
59616 |
||
|
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