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    3.0 PV, FV, NPV, Irr & Mirr

    Uploaded by

    Ishrat Jahan Dia
    This document contains information about calculating net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR) for a capital project. It includes a table showing cash inflows and outflows over 13 years, and calculates the project's NPV at a 7% discount rate as $246,847, IRR as 9.98%, and MIRR as 7.73%. It also notes that NPV will be positive if IRR exceeds the discount rate, and negative if IRR is below the discount rate.

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

    3.0 PV, FV, NPV, Irr & Mirr

    Uploaded by

    Ishrat Jahan Dia
    30 views8 pages
    This document contains information about calculating net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR) for a capital project. It includes a table showing cash inflows and outflows over 13 years, and calculates the project's NPV at a 7% discount rate as $246,847, IRR as 9.98%, and MIRR as 7.73%. It also notes that NPV will be positive if IRR exceeds the discount rate, and negative if IRR is below the discount rate.

    Original Title

    3.0 PV, FV, NPV, IRR & MIRR.xlsx

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    This document contains information about calculating net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR) for a capital project. It includes a table showing cash inflows and outflows over 13 years, and calculates the project's NPV at a 7% discount rate as $246,847, IRR as 9.98%, and MIRR as 7.73%. It also notes that NPV will be positive if IRR exceeds the discount rate, and negative if IRR is below the discount rate.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    30 views8 pages

    3.0 PV, FV, NPV, Irr & Mirr

    Uploaded by

    Ishrat Jahan Dia
    This document contains information about calculating net present value (NPV), internal rate of return (IRR), and modified internal rate of return (MIRR) for a capital project. It includes a table showing cash inflows and outflows over 13 years, and calculates the project's NPV at a 7% discount rate as $246,847, IRR as 9.98%, and MIRR as 7.73%. It also notes that NPV will be positive if IRR exceeds the discount rate, and negative if IRR is below the discount rate.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 8

    Fixed Deposit Receipt Year Rate

    1 4%
    Present Value -5000000 2 5%
    Interest Rate 5% 3 5%
    Term (Years) 10 4 5%
    Compounding periods of Year 12 5 7%
    6 5%
    7 5%
    Future Value 8 8%
    9 5%
    FVSCHEDULE 10 9%

    The Excel FVSchedule function calculates the Future Value of an investment with a variable interest rate.
    Deposit Premium Scheme

    Monthly Payment -20000


    Interest Rate 5%
    Term (Years) 10
    Compounding periods of Year 12

    Future Value

    variable interest rate.


    NPV, IRR, MIRR for Capital Project

    Year Cash Inflows Cash Outflows Net Cash Flow


    Initial Investment 1,000,000 (1,000,000)
    1 200,000 500,000 (300,000)
    2 350,000 600,000 (250,000)
    3 370,000 30,000 340,000
    4 400,000 50,000 350,000
    5 420,000 20,000 400,000
    6 300,000 50,800 249,200
    7 600,000 35,000 565,000
    8 200,000 46,000 154,000
    9 250,000 55,000 195,000
    10 200,000 30,000 170,000
    11 200,000 36,000 164,000
    12 100,000 24,000 76,000
    13 50,000 40,000 10,000
    1,123,200

    Present value (PV) is the current value of a future sum of money


    Net present value (NPV) is the difference between the present value of cash inflows and the presen

    The calculation of IRR implicitly assumes that the positive cash flows earned during the life of a project are re-in
    until the end of the investment period. This could cause the IRR to be overly optimistic. MIRR was developed to
    if IRR > Discount rate, NPV will be > 0
    if IRR < Discount rate, NPV will be < 0
    PV of Net Cash Flow if IRR = Discount rate, NPV will be = 0

    Discount Rate/ Cost of Capital = 7.00%

    Reinvestment Interest Rate 6.00%

    Initial Investment 1,000,000


    NPV

    IRR

    MIRR
    -

    ue of cash inflows and the present value of cash outflows

    d during the life of a project are re-invested at the rate of the IRR
    ly optimistic. MIRR was developed to counter this assumption.
    https://www.youtube.com/watch?v=lWY3abc4hz0
    NPV, IRR, MIRR for Capital Project

    Year Cash Inflows Cash Outflows Net Cash Flow


    Initial Investment 1,000,000 (1,000,000)
    1 200,000 500,000 (300,000)
    2 350,000 600,000 (250,000)
    3 370,000 30,000 340,000
    4 400,000 50,000 350,000
    5 420,000 20,000 400,000
    6 300,000 50,800 249,200
    7 600,000 35,000 565,000
    8 200,000 46,000 154,000
    9 250,000 55,000 195,000
    10 200,000 30,000 170,000
    11 200,000 36,000 164,000
    12 100,000 24,000 76,000
    13 50,000 40,000 10,000
    1,123,200

    Present value (PV) is the current value of a future sum of money


    Net present value (NPV) is the difference between the present value of cash inflows and the presen

    The calculation of IRR implicitly assumes that the positive cash flows earned during the life of a project are re-in
    until the end of the investment period. This could cause the IRR to be overly optimistic. MIRR was developed to
    if IRR > Discount rate, NPV will be > 0
    if IRR < Discount rate, NPV will be < 0
    PV of Net Cash Flow if IRR = Discount rate, NPV will be = 0

    Discount Rate/ Cost of Capital = 7.00%

    Reinvestment Interest Rate 6.00%

    Initial Investment 1,000,000


    NPV 246,847

    IRR 9.98%

    MIRR 7.73%
    - 4%
    6%
    Reinvestment Interest Rate 7%
    9%
    10%
    11%
    12%

    ue of cash inflows and the present value of cash outflows

    d during the life of a project are re-invested at the rate of the IRR
    ly optimistic. MIRR was developed to counter this assumption.
    https://www.youtube.com/watch?v=lWY3abc4hz0

    Sensitivity Analysis

    Cost of Capital
    6% 7% 8% 9% 10%

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