NPV,IRR,MIRR GIVEN NOT GIVEN/ TO FIND

YEAR PROJECT A PROJECT B

0 -100000 -100000 SOURCE NO. OF UNITS PRICE

1 60000 20000 EQ SH 5000 100
2 45000 30000 9% PREF SH

3 30000 50000 10% DEB

4 15000 70000 TERM LOAN

COC 0.12 TOTAL

NPV ₹ 20,331.33 ₹ 21,848.24 ADDITIONAL INFO

IRR 24% 20%
DECISION SELECTED AS
PER NPV PROJECT B TAX RATE 0.3
DECISION SELECTED AS
PER IRR PROJECT A MP OF EQ SH 102
MIRR 17% 18% EXP DIVIDEND 9
DIV GROWTH RATE 5%
INT RATE 10%
PREF DIV RATE 9%
TERM LOAN INT 12%
 CAPITAL STRUCTURE pv

AMOUNT COST OF CAPITAL W WACC perpetual cash outflow

500000 13.823529411764700% 0.333333 0.046078 Rate of discount
200000 9% 0.133333 0.012 pv of perpectuity

300000 7% 0.2 0.014

500000 8% 0.333333 0.028

1500000 1 10% FV
ROI

TIME
PV

PMT/FV
TIME
RATE
PV
 LEVERAGES
25000 SALES 7500000 DEBENTURE 4500000

2500 VC 4200000 INT 0.09

0.1 0.12 0.08 CONTRIBUTION 3300000
25000 20833.33 31250 FC 600000
OPERATING
EBIT 2700000 LEVERAGE 1.222222

FINANCIAL
100000 INT 405000 LEVERAGE 1.176471
0.09
COMBINED
10 EBT 2295000 LEVERAGE 1.437908
₹ -641,765.77
% INCREASE IN
SALES 0.05

100000 %INCREASE IN EPS 0.071895

8
0.09
₹ -553,481.91
 PAYBACK PERIOD
YEAR CASH INFLOW CUMMULATIVE CASH INFLOW COST OF MACHINE
YEAR
1 10000 10000
2 12000 22000 1
3 10000 32000 2

4 7000 39000 3
5 5000 44000 4

CASH OUTFLOW 40000 5

PAYBAK PERIOD 4.2 AV PROFIT

AV INVESTMENT

ARR
 ARR IRR
60000 SALVAGE VALUE 8000 CASH OUTFLOW 100000
REQUIRED RATE
PAT OF RETURN 0.2 COST OF CAPITAL 0.2
6000 LIFE OF MACH 5YRS
7000 YEAR CFAT

5000 60000 0 -100000

6000 8000 1 40000

8000 2 40000
3 20000

6400 4 40000
34000 5 40000

18.82% IRR 23.67%

18.82% WE REJECT THE PROPOSAL SINCE IRR<THE REQUIRED RATE OF RETURN

 NPV AND IRR WACC
RATE 0.1 SOURCE PRICE

YEAR X Y EQ SH 10
0 -60000 -60000 18% PREF SH 100
1 50000 5000 RETAIN EARNING

2 25000 30000 12.5% DEBENTURE 100

3 5000 55000 12% TERM LOAN

NPV ₹ 9,872.28 ₹ 10,661.16 TOTAL

ADDITIONAL INFO

IRR 22.79% 17.41% EQ SH 64.25

PREF SH 90

DEB 95

HE REQUIRED RATE OF RETURN DIVIDEND PAID 8

DIVIDEND GROWTH 0.05
TAX 0.3
AMOUNT COST OFCAPITAL W WACC(BV) SOURCE MV

400000 18.07% 0.2 3.61% EQ SH 2056000

300000 20.00% 0.15 3.00% 18% PREF SH 270000
100000 18.07% 0.05 0.90% RETAIN EARNING 514000

800000 9.21% 0.4 3.68% 12.5% DEBENTURE 760000

400000 8.40% 0.2 1.68% 12% TERM LOAN 400000

2000000 1 12.88% 4000000

FOR MV EQ SH AND RETAIN EARNING

THE RATIO IS 4:1

EXPECTED DIVIDEND 8.4

 SIZE OF INSTALLEMNET
COC W WACC loan amount 300000

18.07% 0.514 9.29% int rate (/ month) 0.08

20.00% 0.0675 1.35% period (* month) 5
18.07% 0.1285 2.32% annual installement ₹ 75,136.94

9.21% 0.19 1.75% BEGINNING OF MONTH 0,1

8.40% 0.1 0.84% END OF MONTH

1 15.55%

TAIN EARNING