MGT201 Complete Solution Assignment#01 Spring 2013

[m.com2013]

MGT201 Complete Solution Assignment#01 Spring 2013

Spring%202013_MGT201%20solution.docx

[+ M.Tariq Malik]

                            *  MGT 201 1^ST 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.Tariq Malik]

m.com2013 gud keep it up 

But always try to upload in relevant subject group.

I have been added ur solution at this link 

http://vustudents.ning.com/forum/topics/1st-assignment-mgt-201-spri...

Once again thanks 

[m.com2013]

thanks alot  for appreciate

[+ M.Tariq Malik]

m.com2013 Welcome 

[m.com2013]

faizan is it right answer?

[m.com2013]

i was confused about it

[+ IUUOƆƎUT +]

 but its accurate bro