Solution of Financial Management MGT201 by
Question#1
NPV= -IO+sum of CFt/(1+i)t ---------------------- HO page # 41
here
-IO= 700000
CF= 162000 n 173600 n 185550 n 189850 n 192980
I = 8% = 0.08
T = 1 , 2 ,3 4, 5
NPV= -700000+ 162000/(1+0.08)^1 + 173600/(1+0.08)^2 + 185550/(1+0.08)^3 + 189850/(1+0.08)^4 + 192980/(1+0.08)^5
NPV= now calculate
Question#2
PI = {sum CFt/(1+i)^t}/IO -------------------------- HO page #42
PI = {sum 163000/(1=0.09)+167456/(1+0.09)^2 + 172850/(1+0.09)^3 + 177940/(1+0.09)^4 + 181550/(1+0.09)^5}/830000
PI =
Question#3 ----------------------- HO page # 40
Payback period for 1st project
Investment = 700,000
So 700,000-(cash inflows )
162000+173600+185550+189850=711000
so payback period is about $ years
Payback period for 2nd project
Investment = 830000
So 830000-(cash inflows)
163000+167456+172850+177940+181550=862807
so payback period is about 5 years
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On Thu, Apr 12, 2012 at 7:06 PM, razaazeem <mc090404558@vu.edu.pk> wrote:dears plzzz send me mgt 201 i m w8ngOn Thu, Apr 12, 2012 at 1:41 PM, mc090402186 Iqra <mc090402186@vu.edu.pk> wrote:
hare PI is 0.8 which is not acceptable and wrong
the actual PI is 1.02 which is = or > 1.0 so it is acceptable plz
correct ur ans arif and i cant understand he u calculat peyback period
em thnkful to u if u help me or send me caculation of pay back period
On 4/12/12, mc100404074 Arif Ali <mc100404074@vu.edu.pk> wrote:
> Dear All,
>
> Based on my workings the results of MGT201 assignment 1 are as follows:
>
> NPV = 17,013.95
> PI = 0.80 < 1
> Payback Period:
> Proj A = 3 years and 11.3 months or 3 years and 343 days
> Proj B = 4 years and 9.832 months or 4 years and 299.06 days
>
> Please notify if anyone has different answers.
>
> Thanks,
> Arif
>
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