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Required ROI 18% Project Omega NPV (Year 0) Project Omega Total NPV Which of the two projects would you fund and why? Required ROI Project Alpha NPV (Year 1) Project Alpha NPV 18%

Required ROI 18% Project Omega NPV (Year 0) Project Omega Total NPV Which of the two projects would you fund and why? Required ROI Project Alpha NPV (Year 1) Project Alpha NPV 18%

Essentials Of Investments
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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Can you please show me the NPV formulas that I need to input for each blue shaded area
## Project Cash Flow Analysis ### Omega Project Cash Flow Information | Year | Inflow | Outflow | Netflow | |------|---------|---------|---------| | 0 | $0 | $225,000| -$225,000 | | 1 | $0 | $190,000| -$190,000 | | 2 | $150,000| $0 | $150,000 | | 3 | $220,000| $30,000 | $190,000 | | 4 | $215,000| $0 | $215,000 | | 5 | $205,000| $30,000 | $175,000 | | 6 | $197,000| $0 | $197,000 | | 7 | $100,000| $30,000 | $70,000 | | **Total** | **$1,087,000** | **$505,000** | **$582,000** | **Required ROI:** 18% **Net Present Value (NPV):** - Project Omega NPV (Year 0): To be calculated - Project Omega Total NPV: To be calculated ### Alpha Project Cash Flow Information | Year | Inflow | Outflow | Netflow | |------|---------|---------|---------| | 0 | $0 | $300,000| -$300,000 | | 1 | $50,000 | $100,000| -$50,000 | | 2 | $150,000| $0 | $150,000 | | 3 | $250,000| $50,000 | $200,000 | | 4 | $250,000| $0 | $250,000 | | 5 | $200,000| $50,000 | $150,000 | | 6 | $180,000| $0 | $180,000 | | 7 | $120,000| $30,000 | $90,000 | | **Total** | **$1,200,000** | **$530,000** | **$670,000** | **Required ROI:** 18% **Net Present Value
Transcribed Image Text:## Project Cash Flow Analysis ### Omega Project Cash Flow Information | Year | Inflow | Outflow | Netflow | |------|---------|---------|---------| | 0 | $0 | $225,000| -$225,000 | | 1 | $0 | $190,000| -$190,000 | | 2 | $150,000| $0 | $150,000 | | 3 | $220,000| $30,000 | $190,000 | | 4 | $215,000| $0 | $215,000 | | 5 | $205,000| $30,000 | $175,000 | | 6 | $197,000| $0 | $197,000 | | 7 | $100,000| $30,000 | $70,000 | | **Total** | **$1,087,000** | **$505,000** | **$582,000** | **Required ROI:** 18% **Net Present Value (NPV):** - Project Omega NPV (Year 0): To be calculated - Project Omega Total NPV: To be calculated ### Alpha Project Cash Flow Information | Year | Inflow | Outflow | Netflow | |------|---------|---------|---------| | 0 | $0 | $300,000| -$300,000 | | 1 | $50,000 | $100,000| -$50,000 | | 2 | $150,000| $0 | $150,000 | | 3 | $250,000| $50,000 | $200,000 | | 4 | $250,000| $0 | $250,000 | | 5 | $200,000| $50,000 | $150,000 | | 6 | $180,000| $0 | $180,000 | | 7 | $120,000| $30,000 | $90,000 | | **Total** | **$1,200,000** | **$530,000** | **$670,000** | **Required ROI:** 18% **Net Present Value
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