Question: Your company is considering two projects, X and Y, whose costs and cash flows are shown below. Your company uses a discount rate of 9%
| Your company is considering two projects, X and Y, whose costs and cash flows are shown below. | |||||||
| Your company uses a discount rate of 9% to evaluate projects. | |||||||
| Rate | Year | X | PV of cash flow | Cumulative CF | Y | PV of cash flow | Cumulative CF |
| 9% | 0 | -$5,000 | -5000 | -5000 | -$5,000 | -5000 | -5000 |
| 1 | $1,000 | $4,500 | |||||
| 2 | $1,500 | $1,500 | |||||
| 3 | $2,000 | $1,000 | |||||
| 4 | $4,000 | $500 | |||||
| Calculate the following for each of the 2 projects: | |||||||
| Highlight all answers in yellow. | |||||||
| NPV for project X: | NPV for project Y: | ||||||
| IRR for project X: | IRR for project Y: | ||||||
| MIRR for project X: | MIRR for project Y: | ||||||
| Payback for project X: | Payback for project Y: | ||||||
| Discounted payback X: | Discounted payback Y: | ||||||
| Equivalent annual annuity X: | Equivalent annual annuity Y: | ||||||
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