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    NPV and Irr

    Uploaded by

    Sakshi Sharma

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    NPV and Irr

    Uploaded by

    Sakshi Sharma
    40 views7 pages

    Original Title

    NPV AND IRR

    Copyright

    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    40 views7 pages

    NPV and Irr

    Uploaded by

    Sakshi Sharma

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 7

    Stated Annual rate Compounding Periodic Rate Compounding Periods

    10% Annually 10% 1


    10% Semi-Annually 5.0% 2
    10% Quarterly 2.5% 4
    10% Monthly 0.83% 12

    FV 50,000
    N 10 40
    R 11% 2.75%

    PV 16,893 ₹ 16,892.61

    12% Ordinary Annuity FV


    1 1000 1574
    2 1000 1405
    3 1000 1254
    4 1000 1120
    5 1000 1000

    6353

    USING FV FORMULA 6.35


    6,353

    FV EXCEL 6,353

    ANNUITY 50,000
    RATE 9%
    N 10

    FV EXCEL 759,646

    FV of Corpus 8,000,000
    RATE 7%
    N 15
    PMT (or Annuity) 318,357 ₹ 318,357.00
    Effective Annual rate

    10.00%
    10.25%
    10.38%
    10.47%

    12% Annuity Due FV


    1 1000 1762
    2 1000 1574
    3 1000 1405
    4 1000 1254
    5 1000 1120

    7115

    7.115

    7,115
    Period CF (in million)
    0 -2000
    1 400
    2 600
    3 800
    4 900

    Rate of Interest 7%
    NPV 238

    Period CF (in million)


    0 -2000
    1 400
    2 600
    3 800
    4 900

    IRR 11.5%

    Scenario 1
    Reliance 2014 2015 2016
    Purchase Price -971
    Dividends 100 100

    Opportunity Cost 9%
    NPV 283

    Reliance 2014 2015 2016


    Purchase Price -971
    Dividends 100 100

    IRR 14.78%

    Scenario 2
    Reliance 2014 2015 2016
    Purchase Price -971
    Dividends 100 100
    Sale Price
    Opportunity Cost (Cost of capital) 9%
    NPV -105

    Reliance 2014 2015 2016


    Purchase Price -971
    Dividends 100 100
    Sale Price
    IRR 6.33%

    Dates CF (in million)


    1-Jan-15 -2000
    30-Jul-16 400
    30-Aug-17 600
    5-Feb-18 800
    5-Sep-19 900

    XIRR 9.68%

    Year Cash Flows

    0 -100
    1 50
    2 30
    3 40
    4 60

    Cost of Capital 10%


    Cost of Capital 30%
    NPV @10% 41
    NPV @30% -5

    IRR (Interpolation) 28.01%


    2017 2018 2019 2020

    100 100 100 1450

    2017 2018 2019 2020

    100 100 100 1450

    2017 2018 2019 2020

    100 100 100 800


    2017 2018 2019 2020

    100 100 100 800

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