A B D E F 1 CAPBUD 3 Capital Budgeting Data Section 6. 7 Cost of investment (initial outlay) 8 Estimated life of investment 9 Estimated salvage value 10 Estimated annual net cash inflow 11 Required rate of retum $500,000 10 years $25,000 $110,000 20.00% 12 Answer Section 13 14 15 Payback period 16 Accounting (average) rate of retum 17 Net present value 18 Internal rate of return FORMULA1 years FORMULA2 FORMULA3 FORMULA4 19 20 21 22 23 Scratch Pad 24 Cash flow table needed for NPV & IRR calculations NPV 25 26 IRR 27 Annual Salvage Combined 28 Year Cash Flow Value Flows 29 -500000 30 1 110000 110000 31 2 110000 110000 110000 110000 32 3 110000 33 4 110000 34 5 110000 110000 35 6 110000 110000 36 7 110000 110000 37 8 110000 110000 38 110000 110000 39 10 110000 25000 135000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Please help with formulas: 

 

A
B
C
D.
E
1
CAPBUD
3
Capital Budgeting
Data Section
6.
7 Cost of investment (initial outlay)
8 Estimated life of investment
9 Estimated salvage value
10 Estimated annual net cash inflow
11 Required rate of retum
$500,000
10 years
$25,000
$110,000
20.00%
12
Answer Section
13
14
15 Payback period
16 Accounting (average) rate of retum
17 Net present value
18 Internal rate of return
FORMULA1 years
FORMULA2
FORMULA3
FORMULA4
19
20
21
22
23
Scratch Pad
24
Cash flow table needed for
25
NPV & IRR calculations
26
NPV
IRR
27
Annual
Salvage
Combined
28
Year
Cash Flow
Value
Flows
29
30
-500000
110000
110000
31
32
110000
110000
110000
110000
33
4
110000
110000
34
5
110000
110000
35
110000
110000
36
7
110000
110000
37
8
110000
110000
38
110000
110000
39
10
110000
25000
135000
112
Transcribed Image Text:A B C D. E 1 CAPBUD 3 Capital Budgeting Data Section 6. 7 Cost of investment (initial outlay) 8 Estimated life of investment 9 Estimated salvage value 10 Estimated annual net cash inflow 11 Required rate of retum $500,000 10 years $25,000 $110,000 20.00% 12 Answer Section 13 14 15 Payback period 16 Accounting (average) rate of retum 17 Net present value 18 Internal rate of return FORMULA1 years FORMULA2 FORMULA3 FORMULA4 19 20 21 22 23 Scratch Pad 24 Cash flow table needed for 25 NPV & IRR calculations 26 NPV IRR 27 Annual Salvage Combined 28 Year Cash Flow Value Flows 29 30 -500000 110000 110000 31 32 110000 110000 110000 110000 33 4 110000 110000 34 5 110000 110000 35 110000 110000 36 7 110000 110000 37 8 110000 110000 38 110000 110000 39 10 110000 25000 135000 112
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