Total cost $ Current value of $ at Year Revenue $ Current value of returns at 10% discount rate $ 50% discount rate 2018 1 2019 2020 6150000 5082644.628 2733333.333 2021 6150000 4620586.026 1822222.222 4 2022 6150000 4200532.75 1214814.815 5 2023 6150000 3818666.137 809876.5432 2024 6150000 3471514.67 539917.6955 7 2025 6457500 3313718.548 377942.3868 8. 2026 6457500 3012471.408 251961.5912 9. 2027 6457500 2738610.371 167974.3941 10 2028 6457500 2489645.791 111982.9294 12 2029 6457500 2057558.505 49770.19086 7. ECONOMIC FEASIBILITY STUDY 7.1. Net Present Value (NPV) N3

Q: Define constant yield method

A: It is the method of ascertaining the collected discount of securities that trade the secondary…

Q: How do you calculate contribution margin?

A: The contribution margin can be calculated by deducting the variable cost from the sales revenue.

Q: Define total net present value (TNPV)

A: Total net present value of an investment is the present value of the future cash inflows due to a…

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Which are the more complex applications of rate-of-return techniques/

A: The question is based on the concept of rate of return and its application in finance

Q: Explain an example of payback how to calculate.

A: A payback period is the amount of time needed to earn back the cost of an investment. The length of…

Q: What is the significance of finding the internal rate of return?

A: IRR helps to check the viability of the project. If IRR is more than Kc than Project seems to be…

Q: Comparison of NPV, IRR or Payback period

A: The net present value (NPV) is the difference between the present value of cash inflows and…

Q: Explain price improvement

A: It is a process where the purchasing customer gets the opportunity to buy shares at a lower cost…

Q: Describe in detail the Stochastic Discount Factor (SDF)and its components.

A: Stochastic discount factor is defined as the concept, which has the combination of the financial…

Q: what is meant by the required rate of return

A: The return which is expected to be earned by investing in a security is known as Required Rate of…

Q: How can we obtain an equal-payment series equivalent to the gradient series?

A: The question is based on the concept of gradient series of payments, which is used in equivalent…

Q: What is meant by partitioning the internal rate of return? Why is this procedure meaningful?

A: Internal rate of return is defined as the annual rate of earnings on an investment and unlike income…

Q: Explain Pass-Through Rates, Yields, and Servicing Fee?

A: Pass-through rateA rate of interest being paid to the investors on the securitized asset after…

Q: Explain four aspects of rate-of-return analysis?

A: The return of return is the return on investment made when the time value cashflows turns to net…

Q: Explain different terms are used to refer to rate of return?

A: Answer: Rate of return is nothing but the returns that are expecting on investments made by…

Q: Explain real rate of return

A: This is the raw rate of return adjusted with inflation. It is used to ascertain the effective return…

Q: Explain expected rate of return

A: Return: Return is defined as the money attained or lost on an investment through certain time…

Q: Describe the Methods for Finding Rate of Return?

A: Capital budgeting is the process a company follows to decide whether to purchase a fixed asset or…

Q: In economics the circular flow model illisytates what

A: The circular flow model in economics is a simplified representation of how the economy functions. It…

Q: What should be done to apply rate-of-return analysis correctly?

A: Rate of return: It can be defined as the rate of interest that has been earned by the company on the…