Академический Документы
Профессиональный Документы
Культура Документы
9.1
Lecture Outline
9.2
McGraw-Hill/Irwin
9.3
McGraw-Hill/Irwin
9.4
Year 0: CF = -165,000
Year 1: CF = 63,120;
Year 2: CF = 70,800;
Year 3: CF = 91,080;
9.5
McGraw-Hill/Irwin
9.6
9.7
9.8
Compute IRR
NPV Profile For The Project
70,000
60,000
IRR = 16.13%
50,000
NPV
40,000
30,000
20,000
10,000
0
-10,000 0
0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 0.2 0.22
-20,000
McGraw-Hill/Irwin
Discount Rate
9.9
McGraw-Hill/Irwin
9.10
9.11
9.12
NPV Profile
IRR = 10.11% and 42.66%
$4,000.00
$2,000.00
NPV
$0.00
($2,000.00)
0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55
($4,000.00)
($6,000.00)
($8,000.00)
($10,000.00)
Discount Rate
McGraw-Hill/Irwin
9.13
McGraw-Hill/Irwin
9.14
Project A Project B
-500
-400
325
325
Which project
should you accept
and why?
325
200
IRR
19.43%
22.17%
NPV
64.05
60.74
McGraw-Hill/Irwin
9.15
NPV Profiles
$160.00
$140.00
$120.00
NPV
$100.00
$80.00
A
B
$60.00
$40.00
$20.00
$0.00
($20.00) 0
0.05
0.1
0.15
0.2
0.25
0.3
($40.00)
Discount Rate
McGraw-Hill/Irwin
9.16
9.17
McGraw-Hill/Irwin
9.18
McGraw-Hill/Irwin
9.19
Project:
Year 1: NI = 13,620;
Year 2: NI = 3,300;
Year 3: NI = 29,100;
average book value 72,000.
require an average accounting return of 25%
9.20
Profitability Index
McGraw-Hill/Irwin
9.21
McGraw-Hill/Irwin
Disadvantages of NPV
May be difficult to
communicate
May be difficult to
calculate
Does not account for
liquidity needs
9.22
McGraw-Hill/Irwin