Finance: Project Cash Flow and Retirement Cash Flow Analysis

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Author’s Note:

FINANCE1
Table of Contents
Question 1........................................................................................................................................2
Question 2........................................................................................................................................2
Part A...............................................................................................................................................2
Part B...............................................................................................................................................3
References........................................................................................................................................5

FINANCE2
Question 1
The present value of the cash flows flowing to the beneficiary would be discounted using
the cost of capital that is usually 10%. The retirement benefits on the other hand would be
considered as the total required amount for the purpose of investment. The total cash flows
arriving from the project would be taken into consideration for the purpose of evaluating the total
sum of value at today’s point of time or the present value of money (Chu et al., 2016). It is
estimated that the project should be run for at least 4.95 years of time after taking into account
the accounted cost of capital that is 10% of discount rate for the purpose of evaluating the
recovery of cash flows invested.
Project Cash Flow Analysis
Particulars Year 0 1 2 3 4 5
Net Cash Flows ($)
-
10,000 2200 3000 3500 2500
200
0
Discount Factor @ 10% 1 0.91 0.83 0.75 0.68
0.6
2
Discounted Cash Flows -10000 2000 2479 2630 1708
124
2
Amount Recovered -10000
-
8000
-
5521
-
2891
-
1184
0.9
5
Project Time (In Years) 4.95
Net Present Value 58
Retirement Cash Flow Analysis
Particulars Year 0 1 2 3 4 5
Retirement Values ($) 0 6000 5000 4000 3000
200
0
Discount Factor @ 10% 1 0.91 0.83 0.75 0.68
0.6
2
Discounted Cash Flows 0 5455 4132 3005 2049
124
2
Net Present Value 15883
Total No. of Years
5
Years