15 annual payment of Rs.5000 are made in a deposit that pays 14% interest.

How much it will accumulate at the end

M deposits Rs.2Lakh in a bank account that pays 10%. How much can he withdraw as constant amount annually for
An investor has 2 options. (a) 6000 after 1 year (b) 9000 after 4 years. Assume a discount rate of 10%. Which altern
You are planning to buy a car after 5 years that is presently available for 2.5 lakhs. The price will go up by 20%. How
Alpha ltd is considering to buy one of the equipments A or B. Equipment A costs Rs.75000 and results in a cash inflo
A project has the following cash flow from year 1 to 5 respectively; 2lakhs, 2 lakhs, 3Lakhs, 3 Lakhs, 3.5Lakhs. calc
Arun borrows Rs.1500000 to purchase a home at an interest rate of 8.5% repayable in 10 years. How much is his ann
AB ltd wants to purchase plant for Rs.3L cash or Rs.4.5L. 5 equal installments of Rs.90000 each at end of yr. Th
An investor deposits Rs.100 in a bank account for 5 years and 8% p.a interest. Find out the amount which he will ha
A finance company advertises that it will pay a lump sum ofRs.44650 at the end of 5 years to investors who deposit
pay you 4lakh after 3 yrs if u deposit 2 lakh now ?what return has he promised?

ANS 1
nper
annuity
rate
fv
ANS 11
fv
pv
nper

15
5000
14%
($219,212.07)

400000
200000
3
26%

43.8424141313
ANS 6
200,000.00 rate
200,000.00
300,000.00
300,000.00
350,000.00
1,000,000.00 23480.83

ANS 2
pv
rate
nper
pmt

9.00%

uch it will accumulate at the end of the tenure.

s constant amount annually for a period of 15 years?
scount rate of 10%. Which alternative should he opt for? Would your answer differ if the rate is 20%?
he price will go up by 20%. How much should you deposit at the end of each year @ 6% to make your plan a success?
75000 and results in a cash inflow of Rs.20000 per year for 6 years. Equipment B costs Rs.50000 and is yielding Rs.14000 for 6
3Lakhs, 3 Lakhs, 3.5Lakhs. calculate the NPV assuming a discount rate of 10%.
n 10 years. How much is his annual EMI outgo? Prepare loan amortisation table
f Rs.90000 each at end of yr. The required rate 15%. Which should be considered?
out the amount which he will have in his account if interest is compounded (a) annually (b) semi annually (c) quarterly
5 years to investors who deposit annually Rs.6000 for 5 years. What is the interest rate?

ANS 9
pv
nper
rate

200000
10%
15
$26,294.76
IRR
-1000000
200000
200000
300000
300000
350000

ANS 8
annuity
nper
rate

100
5
8%
$146.93
Ans 2
rate
nper
pv
pmt

9.81%

10%
15
200000
$26,294.76

your plan a success?

and is yielding Rs.14000 for 6 years. The compays discount rate is 11%. Calculate the NPV of both the machines and recommen
initial investment 10 lakh

nnually (c) quarterly

pv1
pv2
90000
300000
450000
5
15%
($301,693.96) option 1 is better

achines and recommend which one to buy.

All Cash Out

All Cash In
-100,000.00
-28,000.00
-16,500.00
-15,000.00
-10,000.00
-15,000.00

Net Cash Flows

-100,000
80,000.00
52,000
60,000.00
43,500
40,000.00
25,000
35,000.00
25,000
20,000.00
5,000

Annual RRR (Discount)

NPV
Answer:
NPV Profile
Annual RRR (Discount)
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
26%
27%
28%
29%
30%
31%
32%
33%

0.2
2,074.97
Accepted

+ NPV: Accept
+ NPV: Accept
35,061
32,301
29,637
27,067
24,584
22,186
19,868
17,626
15,458
13,359
11,327
9,359
7,453
5,605
3,813
2,075
389
-1,248
-1,248
-2,838
-2,838
-4,382
-4,382
-5,882
-5,882
-7,339
-7,339
-8,757
-8,757
-10,135
-10,135
-11,476
-11,476
-12,781
-12,781
-14,052
-14,052
-15,288
-15,288
-16,493
-16,493

40,000
30,000
20,000
10,000

0
5% 6%
-10,000
-20,000
-30,000

34%
35%
36%

-17,667
-18,810
-19,925

-17,667
-18,810
-19,925

Check

NPV Profile
+ NPV: Accept

NPV Accept

40,000
30,000
20,000
10,000

0
5% 6% 7% 8% 9% 10%11%12%13%14%15%16%17%18%19%20%21%22%23%24%25%26%27%28%29%3
-10,000
-20,000
-30,000

%24%25%26%27%28%29%30%31%32%33%34%35%36%

Non-conventional Cash Flows

Cash Out
Cash Flow 0
Cash Flow 1
Cash Flow 2
RRR

Cash In
-Rs. 61,000
-Rs. 46,485
-Rs. 149,000
15%

net cash
Rs. 0
-Rs. 61,000
Rs. 206,000
Rs. 159,515
Rs. 46,485
-Rs. 102,515

MIRR considers both the cost of th

IRR
NPV

13.73%
192.63

RRR

MIRR
15.08%

NPV
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
26%
27%
28%
29%
30%
31%
32%
33%
34%
35%
36%
37%
38%
39%
40%
41%
42%
43%

($709.50)
($496.27)
($300.22)
($120.57)
$43.47
$192.63
$327.59
$449.01
$557.53
$653.73
$738.19
$811.45
$874.03
$926.40
$969.04
$1,002.40
$1,026.90
$1,042.94
$1,050.90
$1,051.17
$1,044.08
$1,029.98
$1,009.18
$981.99
$948.71
$909.60
$864.94
$814.99
$759.98
$700.14
$635.71
$566.90
$493.90
$416.92

$1,500.00
$1,000.00
$500.00
$0.00
($500.00)
($1,000.00)
($1,500.00)
($2,000.00)
($2,500.00)
($3,000.00)

44%
45%
46%
47%
48%
49%
50%
51%
52%
53%
54%
55%
56%
57%
58%
59%
60%
61%
62%
63%
64%
65%
66%
67%
68%
69%
70%

$336.13
$251.72
$163.87
$72.72
($21.55)
($118.80)
($218.89)
($321.67)
($427.03)
($534.82)
($644.92)
($757.23)
($871.63)
($988.01)
($1,106.27)
($1,226.32)
($1,348.05)
($1,471.37)
($1,596.21)
($1,722.48)
($1,850.09)
($1,978.97)
($2,109.05)
($2,240.26)
($2,372.52)
($2,505.78)
($2,639.97)

siders both the cost of the investment and the interest received on reinvestment of cash.

npv

npv

assumptions
1. Investments occurs at the start
2. reimburses the same IRR.
MIRR.

npv

Months
Days Years

Date
Cash Flow
11/12/2010
-5000
12/12/2010
700
1/12/2011
700
2/12/2011
700
3/12/2011
700
3/12/2012
700
3/12/2013
700
3/13/2013
700
3/14/2013
700
3/15/2013
700

rate

10%

xnpv

Returns the net present value for a schedule of cash flows th

Returns the internal rate of return for a schedule of cash flow

xnpv
xirr

603.04
21.64%

or a schedule of cash flows that is not necessarily periodic. To calculate the net present value for a series of cash flows that is periodic, use the NPV functio

rn for a schedule of cash flows that is not necessarily periodic. To calculate the internal rate of return for a series of periodic cash flows, use the IRR functi

hat is periodic, use the NPV function

odic cash flows, use the IRR function.