ACCCB543 Competency 1

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University of Phoenix *

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543

Subject

Management

Date

Jan 9, 2024

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xlsx

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4

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Daniel Pickett Competency 1 Notes Project A Useful Life of 4 years and no salvage value Initial Cash Expenditure $ 400,000.00 Annual Expected Cash Inflow $ 126,000.00 Cash Flow Benefits Next 4 Years Project A FV Present Value Table Factor Present Value Present Value Year 1 $ 126,000.00 0.925926 $ 116,666.68 Year 2 $ 126,000.00 0.857339 $ 108,024.71 Year 3 $ 126,000.00 0.793832 $ 100,022.83 Year 4 $ 126,000.00 0.73503 $ 92,613.78 Total $ 417,328.00 NPV Project A $ 17,328.00 Project B FV Present Value Table Factor Present Value Present Value Year 1 $ 52,800.00 0.925926 $ 48,888.89 Year 2 $ 52,800.00 0.857339 $ 45,267.50 Year 3 $ 52,800.00 0.793832 $ 41,914.33 Year 4 $ 52,800.00 0.73503 $ 38,809.58 Total $ 174,880.31 NPV Project B $ 14,880.31 Internal Rate of Return on Second Sheet
Project B Desired Rate of Return 8% $ 160,000.00 $ 52,800.00 Next 4 Years Present Value of Future Cash Inflows X Cost of Investment (Required Cash Outflow) (Y) Net Present Value Z Table 1, 8% Year 1 0.925926 Year 2 0.857339 Year 3 0.793832 Year 4 0.73503
Daniel Pickett Competency 1 Project A Project B PV Factor 3.1746031746 3.030303 10% 12% IRR>DRR? YES YES Return from Table 2, which is the IRR
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N=4 Desired Rate of Return 8% Future Cash Inflow*PV Factor =PV PV Factor = Cost of Investment / Future Cash Inflow