Question

In: Finance

A capital budget project is estimated to have the following after-tax cash flows, by year: 0...

A capital budget project is estimated to have the following after-tax cash flows, by year:

0

1

2

3

4

-$35,000

$13,000

$15,000

$17,000

$19,000

Use the information in the table above for the following questions 11a. through 11f. The company utilizes a discount rate of 9% to evaluate capital projects. You may have rounding errors in your calculations so choose the closest answer.

1. Find NPV, IRR, MIRR, and PI for the project shown above

2. Find Payback and Discounted Payback

Please show work!

Solutions

Expert Solution

We can calculate the desired result in excel sheet as follows:

Formulas used in the excel sheet are:

The answers are calculated as above which are

1) NPV of the Project = $ 16,139

IRR of the Project = 27.21%

MIRR of the Project = 19.84%

PI of the Project = 46.11%

2) Payback Period of Project = 2.41 years

Discounted Payback period = 2.53 years

Hope I am able to solve your concern. If you are satisfied hit a thumbs up !!

jeff jeffy answered 2 years ago
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