Managerial Finance
Sullah-bcu
Question2B.xlsxNPV
| Net present value | ||||||
| year 0 | year1 | year2 | year3 | Total | ||
| £ | £ | £ | £ | £ | ||
| INVESTMENT | ||||||
| Land | (5,000) | (5,000) | ||||
| Building costs | (9,480) | (9,480) | ||||
| fittings | (2,196) | (2,196) | ||||
| 0 | ||||||
| 0 | ||||||
| Cash inflows | 0 | |||||
| sales | 34,320 | 35,006 | 35,707 | 105,033 | ||
| CASH OUTFLOWS | ||||||
| cost of sales:product X | (8,004) | (8,164) | (8,327) | (24,495) | ||
| cost of sales product Y | (5,660) | (5,773) | (5,889) | (17,322) | ||
| staff costs | (1,416) | (1,444) | (1,473) | (4,334) | ||
| light and heat | (2,011) | (2,051) | (2,092) | (6,154) | ||
| other overheads | (7,708) | (7,862) | (8,019) | (23,590) | ||
| NET INFLOW/OUTFLOW | (16,676) | 9,521 | 9,711 | 9,906 | 12,462 | |
| discount factor | 12% | 1 | 0.893 | 0.797 | 0.712 | |
| NET PRESENT VALUE | (16,676) | 8,501 | 7,742 | 7,051 | 6,617 | |
| Internal rate of return IRR =irr | 33.8% |
PBP
| PAY BACK PERIOD (PBP) | |||||
| Year0 | -16676 | ||||
| year1 | 9521 | -7155 | 0.74 | ||
| year2 | 9711.42 | ||||
| year3 | 9905.6484 | ||||
| PBP= | 1 YEAR , 9 MONTHS | ||||
| DISCOUNTED PAY BACK PERIOD (DPBP) | |||||
| £ | |||||
| YEAR 0 | -16,676 | ||||
| YEAR 1 | 8,501 | ||||
| YEAR 2 | 7,742 | -433 | 0.0614097291 | 1 | |
| YEAR 3 | 7,051 | ||||
| DPBP = | 2 YEARS & 1 MONTH | ||||
| Internal rate of return IRR =irr |
IRR
| Net present value | ||||||
| year 0 | year1 | year2 | year3 | Total | ||
| £ | £ | £ | £ | £ | ||
| INVESTMENT | ||||||
| Land | (5,000) | (5,000) | ||||
| Building costs | (9,480) | (9,480) | ||||
| fittings | (2,196) | (2,196) | ||||
| 0 | ||||||
| 0 | ||||||
| Cash inflows | 0 | |||||
| sales | 34,320 | 35,006 | 35,707 | 105,033 | ||
| CASH OUTFLOWS | ||||||
| cost of sales:product X | (8,004) | (8,164) | (8,327) | (24,495) | ||
| cost of sales product Y | (5,660) | (5,773) | (5,889) | (17,322) | ||
| staff costs | (1,416) | (1,444) | (1,473) | (4,334) | ||
| light and heat | (2,011) | (2,051) | (2,092) | (6,154) | ||
| other overheads | (7,708) | (7,862) | (8,019) | (23,590) | ||
| NET INFLOW/OUTFLOW | (16,676) | 9,521 | 9,711 | 9,906 | 12,462 | |
| discount factor | 17% | 1 | 0.855 | 0.731 | 0.624 | |
| NET PRESENT VALUE | s | (16,676) | 8,138 | 7,094 | 6,185 | 4,741 |
| Internal rate of return IRR =irr | 33.8% |
