Net present value

uneven, we need to calculate the cumulative net cash flow for each period and then use the following formula for payback period: Payback Period = A + B C In the above formula, A is the last period with a negative cumulative cash flow; B is the absolute value of cumulative cash flow at the end of the period A; C is the total cash flow during the period after A Profitability Index is an investment appraisal technique calculated by dividing the present value of future cash flows of a project by the initial

show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button. Chapter 8 Exercise 1: 1. Basic present value calculations Calculate the present value of the following cash flows, rounding to the nearest dollar: A single cash inflow of $12,000 in five years, discounted at a 12% rate of return. 12000/(1.12)^5 = $6,809 An annual receipt of $16,000 over the next 12 years

by 8.46%, the Operating Income still get an increase up to 22.154% compare to the year ended 2009. Finally, the Net Income in 2010 rose up by 20.91%, from 1,052.96 million in 2009 to 1,273.14 in 2010. For the fifth consecutive year, CapitaLand has recorded the Net Profit after tax and minority interests exceeding S$1 billion. Over the last five years, CapitaLand has achieved total Net Profit 7.4 billion. This profitability is the result of the Group’s aggressive growth strategy, and focus on the

ACCT505 Part B Capital Budgeting problem Clark Paints Data: Cost of new equipment $200,000 Expected life of equipment in years 5 yrs Disposal value in 5 years $40,000 Life production - number of cans 5,500,000 Annual production or purchase needs $1,100,000 Initial training costs Number of workers needed 3 Annual hours to be worked per employee 2000 hrs Earnings

based on the net present value (NPV) of its cash flows and the internal rate of return (IRR) over the 5 year period. We have made certain assumptions to calculate the final numbers which are outlined below. The “Appendix” contains the detailed calculations. Based on our calculations the project is economically feasible. The NPV of the project is $130,961. A positive NPV implies that the present values of the cash outflows outweigh the present values of the cash inflows thereby adding value to the

ACT public transport system, and from businesses perspective as it will provide economic benefits. From the global standing, environmental benefits such as lower pollution and greenhouse effects also taken into account. Therefore, the business case presents a clear whose costs and benefits taken into account. However, it would be better if the analysts make a list of interest groups/stakeholders that are likely to be affected by the project. In general, consider the following groups: consumers, firms

reported a net profit of $7,000,000 and $15,000,000 for the 2009. The company’s most profitable division has been its online book sale. Due to the fact that CanGo has been increasing its sales and revenue for more than 100%, the company has demonstrate that it is a profitable organization, but at the

over NASDAQ because the former is more informative and easy to use. Personal assistance is also guaranteed when using NYSE. Question Two Operating cash flow results from the firm 's normal business activities. Operating cash flow is calculated the net income against items such as changes to accounts receivable, changes in inventory, and depreciation (Farshadfar & Monem, 2013). It measures whether an organization can

To justify the investment, we need to make the net present worth equal or larger than zero. So the question become what is the minimum salvage value (S) when net present worth is equal to zero. 0 = -$100,000 + $10,000(P/A, 15%, 4) + S (P/F, 15%, 4) 0 = -$100,000 + $10,000 (2.855) + S (0.5718) S = $124,956 The interest factor can be found by checking the interest factor table. Figure 1: The interest factor table of 15% As the minimum salvage value is larger than the initial investment, this investment

To: EEC President Company Memo This memo has been constructed for the purpose of reporting information the president of the company in reflection the purchasing of a supplier in the near future. It reflects information concerning Calculate Net Present (NPV), Internal Rate of Return (IRR), along with the payback of the investment opportunity. In this company memo the following information will be discussed: $500,000 savings per year for the next 10 years. EEC’s cost of capital/14%. EEC’s purchase