Answer for capital budgeting (Past Year Questions) PDF

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Jun 2018payback period Project b 2 years =10000/payback period project A 2.years = (3-1) + [10000-9500/3000]Project BNPV = Total PV - IO NPV = 3500 (3) - 10000 10630.profitability index =43705/ initial outlay 10000 1. NPV 630.Project A year CF PVIF@12% PV year 1 6500 0 5803. year 2 3000 0 2391. year...

Description

Jun 2018 payback period Project b

2.9 years =10000/3500

payback period project A

years = (3-1) + 2.2 [10000-9500/3000]

Project B NPV = Total PV - IO NPV = 3500 (3.0373) - 10000 initial outlay NPV Project A year year 1 year 2 year 3 year 4

10630.55 10000 630.55

CF

profitability index =43705.5/50000 1.063055

3.0374

PV

PVIF@12% 6500 3000 3000 1000

0.8929 0.7972 0.7118 0.6355 TOTAL PV less: IO NPV

5803.85 2391.6 2135.4 635.5 10966.35 10000 966.35

Profitability index B = 50417.9/400000 1.096635

Jan 2018 payback period Project A

3.33333 years =50000/15000 years =( 3-1)+ (470002.35 40000/20000) 47000 35000 5000 40000 20000 60000 4000

payback period project B initial outlay year 1 year 2 year 3 year 4 Project A NPV = Total PV - IO NPV = 15000 (2.9137) 50000

profitability index 43705.5 =43705.5/50000 50000 -6294.5

NPV Project B year

CF

PVIF@14%

0.87411

PV

year 1 year 2 year 3 year 4

35000 5000 20000 4000

0.8772 0.7695 0.675 0.5921 TOTAL PV less: IO NPV Profitability index B = 50417.9/470000

30702 3847.5 13500 2368.4 50417.9 47000 3417.9

1.072721

Dec 2016 payback period Project aqua

3.6 years =100/28

payback period project Agro

years = (5-1) + [1004.4 91/23]

Project Aqua 100.934 profitability index 4 =43705.5/50000

NPV = Total PV - IO NPV = 28 (3.6048) - 100 initial outlay NPV

1.00934 4

100 0.9344

Project Agro year year 1 year 2 year 3 year 4 year 5

PVIF@12%

CF 25 20 23 23 23 3.6048

475833.6/4800 00

0.8929 0.7972 0.7118 0.6355 0.5674 TOTAL PV less: IO NPV

PV 22.3225 15.944 16.3714 14.6165 13.0502 82.3046 100 17.6954

Profitability index B = 50417.9/400000 0.82304 6

Dec 2015 payback period

3.6 years =480000/132000

Project b payback period project A initial outlay year 1 year 2 year 3 year 4 Project B NPV = Total PV - IO NPV = 132000 (3.6048) - 480000= -4166.4 initial outlay NPV Project A year year 1 year 2 year 3 year 4 year 5

years = (4-1) + [4000003.6 280000/200000] 400000 80000 100000 180000 100000 280000 200000 480000

CF

0.99132

PV

PVIF@12% 80000 100000 100000 200000 100000

3.6048

475833.6/48000 0

475833.6 profitability index 480000 -4166.4

0.8929 0.7972 0.7118 0.6355 0.5674 TOTAL PV less: IO NPV

71432 79720 71180 127100 56740 406172 400000 6172

Profitability index B = 406172/400000 1.01543...