info needed on first three pictures, question is on the last picture

Project Financial Benefit Analysis Frequently used measures Return on Assets (ROA) Net Income ROA= Total Assets Net income for a project is the expected earnings and total assets is the value of the assets applied to the project. Return on Investment (ROI) Net Income ROI = Investment Payback period Payback period is the smallest n such that Cash_Inflow, 2 Initial_Investment 1 Net Present Value (NPV) and Internal Rate of Return (IRR) CF NPV = (1+r) =0 Where CF,: cash flow at period t; CF, = CFB.t-CFc.t CFB.t: Benefit at time period t; CFct: Cost at time period t r: per period cost of capital for the organization i: Annual interest rate m: Number of period within i (interest rate); For example, if i = annual interest rate, then m=12 CF.: Initial investment i=(1+r)" -1 and r =(1+i)= -1 1 Internal rate of return (IRR) is the interest or discount rate, i or r, that results in NPV=0 CF. NPV = 0 = 5 (1+r) t=0 2 Homework #2 A benefit cost analysis is conducted for a training program to reduce operator assembly Errors, thus reduce scrap cost. Project benefit: Scrap reduction of $700 in month 3 Scrap reduction of $500 in month 4 Scrap reduction of $450 in month 5 and 6 Project Costs: Training material preparation: $400 in month 1 Employee training: $840 in month 2 Reporting of program effectiveness will cost $100 in month 6 $700 $500 $450 $450 Cash (+) 3 4 5 0 Cash (-) $100 $400 3 $840 Homework #2 Assume Cost of capital (i) =9.5% per year 1. Calculate Net Present Value? 2. Is this project worth while? Why? 3. What is the IRR of this project? Don't have to solve for r; try r= 21.51% per month! 4. How many payback period does it take to start breaking even? 4