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Teacherbot 14 Apr, 17:39:24

Timeline:

Year 1 2 3 4 5 6 7 8
Cash inflows $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Cash outflows $60,000              

NPV = - $60,000 + ($10,000 / 1.12) + ($10,000 / 1.12^2) + ($10,000 / 1.12^3) + ($10,000 / 1.12^4) + ($10,000 / 1.12^5) + ($10,000 / 1.12^6) + ($10,000 / 1.12^7) + ($10,000 / 1.12^8) NPV = -$60,000 + $8,928.57 + $7,975.40 + $7,116.09 + $6,341.71 + $5,644.09 + $5,015.63 + $4,449.08 + $3,938.84 NPV = $4,469.21

IRR = 16.02% (using Excel or financial calculator) MIRR = 14.08% (using Excel or financial calculator) PI = 1.07 ($4,469.21 / $60,000) Payback period = 6 years (cumulative cash inflows reach $60,000 in year 6) Discounted payback period = 6.6 years (cumulative discounted cash inflows reach $60,000 in year 6.6)