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    Case Study

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    anhdu7
    Project A has a payback period of 1 year, average annual after-tax profits of $6,000, and NPV of -$909 at 10% discount rate. Project B has a payback period of 1.09 years, average annual after-tax profits of $5,500, and NPV of $5,909.66 at 10% discount rate. Project C has a payback period of 1.91 years, average annual after-tax profits of $5,000.20, and NPV of $9,944.06 at 10% discount rate. Project D has the shortest payback period of 0.69 years, average annual after-tax profits of $4,333.60

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    Case Study

    Uploaded by

    anhdu7
    227 views6 pages
    Project A has a payback period of 1 year, average annual after-tax profits of $6,000, and NPV of -$909 at 10% discount rate. Project B has a payback period of 1.09 years, average annual after-tax profits of $5,500, and NPV of $5,909.66 at 10% discount rate. Project C has a payback period of 1.91 years, average annual after-tax profits of $5,000.20, and NPV of $9,944.06 at 10% discount rate. Project D has the shortest payback period of 0.69 years, average annual after-tax profits of $4,333.60

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    Project A has a payback period of 1 year, average annual after-tax profits of $6,000, and NPV of -$909 at 10% discount rate. Project B has a payback period of 1.09 years, average annual after-tax profits of $5,500, and NPV of $5,909.66 at 10% discount rate. Project C has a payback period of 1.91 years, average annual after-tax profits of $5,000.20, and NPV of $9,944.06 at 10% discount rate. Project D has the shortest payback period of 0.69 years, average annual after-tax profits of $4,333.60

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    227 views6 pages

    Case Study

    Uploaded by

    anhdu7
    Project A has a payback period of 1 year, average annual after-tax profits of $6,000, and NPV of -$909 at 10% discount rate. Project B has a payback period of 1.09 years, average annual after-tax profits of $5,500, and NPV of $5,909.66 at 10% discount rate. Project C has a payback period of 1.91 years, average annual after-tax profits of $5,000.20, and NPV of $9,944.06 at 10% discount rate. Project D has the shortest payback period of 0.69 years, average annual after-tax profits of $4,333.60

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 6

    bi 1

    Comparison of Project Cash Flows* ($ thousands)

    Year

    Project A
    Type of Cash Flow
    Investment
    Revenue
    Operating
    Payback period
    Average annual after-tax profits
    Required investment

    The accounting return on investment.


    Internal rate of return
    NPV (WACC = 10%)
    NPV (WACC = 35%)

    0
    ($10,000)

    1
    -

    $ 21,000
    $ 11,000

    1
    6,000
    10,000
    1
    1
    (909)
    (2,593)

    Year

    Project B
    Type of Cash Flow
    Investment
    Revenue
    Operating
    Payback period
    Average annual after-tax profits
    Required investment

    The accounting return on investment.


    Internal rate of return
    NPV (WACC = 10%)
    NPV (WACC = 35%)

    0
    ($10,000)
    0
    0

    1
    0
    $15,000
    5,833

    2
    0
    $17,000
    7,833

    1.09
    5,500
    10,000
    0.55
    1.10
    5909.66942
    1820.27435

    Year

    Project C
    Type of Cash Flow
    Investment
    Revenue
    Operating

    0
    ($10,000)
    0
    0

    Payback period
    Average annual after-tax profits

    1.91
    5,000.20
    10,000.00
    0.50002

    Required investment

    The accounting return on investment.

    1
    0
    $10,000
    5,555

    2
    0
    $11,000
    4,889

    Internal rate of return

    1.50006

    NPV (WACC = 10%)

    9944.06461
    2516.73525

    NPV (WACC = 35%)

    Year

    Project D
    Type of Cash Flow
    Investment
    Revenue
    Operating

    0
    ($10,000)
    0
    0

    Payback period
    Average annual after-tax profits

    0.69
    4,333.60
    10,000.00
    0.43336
    1.30008

    Required investment

    The accounting return on investment.


    Internal rate of return

    1
    0
    $30,000
    15,555

    2
    0
    $10,000
    5,555

    8892.52442
    4268.05365

    NPV (WACC = 10%)


    NPV (WACC = 35%)

    Bi 2
    Electronics Unlimited
    0
    u t ti thi im 0
    My mc thit b
    Vn lu ng rng tng thm
    Cash Flow
    Total sales

    -500000
    -2700000

    Cost of sales
    Administrative expenses
    Chi ph gii thiu

    Depreciation
    EBIT
    Taxes (40%)
    NOPAT
    Cng khu hao
    Dng tin hot ng
    Dng tin cui d n
    Thu hi vn lu ng
    Tng dng tin cui d n
    Dng tin d kin
    WACC

    -3200000
    20%

    Year
    3

    -3510000

    -3510000 -2340000

    10000000
    6000000
    2350000
    200000
    100000
    1350000
    540000
    810000
    100000
    910000

    13000000 13000000
    7800000 7800000
    3055000 3055000
    100000
    2045000
    818000
    1227000
    100000
    1327000

    -2600000 -2183000

    100000
    2045000
    818000
    1227000
    100000
    1327000

    -1013000

    NPV
    IRR

    (2,094,717.72)
    11%

    nn chn d n v NPV dng

    Cu 3:
    Year
    Investment
    PV of Cash Flow
    PV of Project

    0
    -110000
    210000
    100000

    Cu 4

    Cost
    Invesment
    Sales
    Operating Cost

    0
    1967
    -100

    1
    1968
    -200

    Year
    2
    1969
    -200

    3
    1970
    -200

    ar
    3
    -

    ar
    3
    0
    0
    0

    ar
    3
    0
    $30,000
    15,555

    ar
    3
    0
    $5,000
    2,222

    Year
    4

    -1170000
    8666666.67 4333333.33
    5200000
    2600000
    2036666.67 1018333.33
    100000
    1330000
    532000
    798000
    100000
    898000

    -272000

    100000
    615000
    246000
    369000
    100000
    469000
    13230000
    13230000
    13699000

    4
    1971
    -200
    490

    5
    1972

    6
    1973

    7
    1974

    8
    1975

    9
    1976

    560
    490

    560
    490

    560
    490

    560
    490

    560
    490

    1977
    560

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