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# MGT201 Complete Solution Assignment#01 Spring 2013

MGT201 Complete Solution Assignment#01 Spring 2013

Spring%202013_MGT201%20solution.docx

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*  MGT 201 1ST Assignment solution*

Presented by :

Payback period:

 Years Cash flow Cumulative cash           flow 0 (500,000) (500,000) 1 (800,000) (1300,000) 2 150,000 (1150,000) 3 200,000 (950,000) 4 250,000 (700,000) 5 300,000 (400,000) 6 300,000 (100,000) 7 300,000 200,000 8 300,000 500,000 9 300,000 800,000 10 300,000 1100,000

Payback period:        =       6 + (100,000/300,000)

=         6 +0.333

Payback period   =         6.33 years

Net present value:

 Year Cash flow Present value discount factor (14%) Present value 0 (500,000) 1.00 ( 500,000) 1 (800,000) 0.877 (701600) 2 150,000 0.769 115,350 3 200,000 0.675 135,000 4 250,000 0.592 148,000 5-10 300,000 2.304 691,200 Net present value (112,050)

Because the net present value is negative the project is unacceptable.

 Year Cash flow Discount factor (12%) Present value Discount factor (11%) Present value 0 (500,000) 1.00 (500,000) 1.00 (500,000) 1 (800,000) 0.893 (714,400) 0.901 ( 720,800) 2 150,000 0.797 119,550 0.812 121,800 3 200,000 0.712 142,400 0.731 146,200 4 250,000 0.636 159,000 0.659 164,750 5-10 300,000 2.613 783,900 2.787 836,100 ( 9,550) 48,050

=0.01  [   X [0.11           48050, IRR        O,   0.12        (9550)]48050]57600

=       X/0.01=48050/57600

X   =     (0.01)*(48050)/57600

=0.00834

X   =   0.00834

= X    + 0.11

=O.OO834+0.11

IRR        =0.11834     OR   11.834%

Because the internal rate of return is less than the required rate of return the project would not be acceptable.

m.com2013 gud keep it up

But always try to upload in relevant subject group.

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Once again thanks

thanks alot  for appreciate

m.com2013 Welcome

but its accurate bro

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