Finance: Finding NPV, IRR, MIRR, Payback and Discounted Payback

\Running head: FINANCE
Finance
Name of the Student:
Name of the University:
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FINANCE
1
Table of Contents
1. Finding NPV, IRR, MIRR, payback and discounted payback for both the alternatives:......2
2. Explaining which alternative should be chosen for investment:............................................6
Reference:..................................................................................................................................8

FINANCE
2
1. Finding NPV, IRR, MIRR, payback and discounted payback for both the
alternatives:
Initial Investment Alternative 1 Alternative 2
Cost of asset $ 90,000.00 $ 100,000.00
additional cost $ - $ 10,000.00
Total cost $ 90,000.00 $ 110,000.00
Proceeds from sale of old machine $ (20,000.00)
tax on sales $ 8,000.00
Changes in working capital $ 15,000.00 $ 22,000.00
Total investment $ 105,000.00 $ 120,000.00
Alternative 1 0 1 2 3 4 5
REVENUE $
1,000,0
00.00
$
1,175,0
00.00
$
1,300,0
00.00
$
1,425,0
00.00
$
1,550,0
00.00
LESS CASH EXPENSES $
801,500
.00
$
884,200
.00
$
918,100
.00
$
943,100
.00
$
968,100
.00
PROFIT BEFORE
DEPRECIATION AND
TAXES (PBDT)
$
198,500
.00
$
290,800
.00
$
381,900
.00
$
481,900
.00
$
581,900
.00