WACC= 10.00% Fixed Budget = $250,000 Project Initial Investment PV of Inflows NPV IRR PI A -$80,000 $100,000 $20,000 12.00% 1.25 $112,000 $145,000 $36,000 $42,000 $45,000 -$4,000 1.60 -$70,000 -$100,000 B 20.00% 16.00% 1.45 -$40,000 -$60,000 -$110,000 8.00% 0.90 E $79,000 $19,000 15.00% 1.32 F $126,500 $16,500 11.00% 1.15 Ranking by NPV Project Initial Investment PV of Inflows NPV IRR PI Investment NPV -$100,000 -$70,000 -$80,000 $145,000 $45,000 $42,000 $20,000 $100,000 $45,000 $87,000 16.00% 1.45 $112,000 $100,000 20.00% 1.60 $170,000 A 12.00% 1.25 $250,000 $107,000 -$60,000 -$110,000 -$40,000 $79,000 $126,500 $36,000 E $19,000 15.00% 1.32 $16,500 -$4,000 F 11.00% 1.15 D 8.00% 0.90 Ranking by IRR or PI Project Initial Investment PV of Inflows NPV IRR PI Investment NP -$70,000 -$100,000 -$60,000 $112,000 $145,000 $42,000 $45,000 $19,000 $70,000 $42,000 $87,000 $106,000 B 20.00% 1.60 $170,000 $230,000 16.00% 1.45 $79,000 $100,000 $126,500 E 15.00% 1.32 -$80,000 -$110,000 $20,000 $16,500 -$4,000 A 12.00% 1.25 11.00% 1.15 D -$40,000 $36,000 8.00% 0.90
WACC= 10.00% Fixed Budget = $250,000 Project Initial Investment PV of Inflows NPV IRR PI A -$80,000 $100,000 $20,000 12.00% 1.25 $112,000 $145,000 $36,000 $42,000 $45,000 -$4,000 1.60 -$70,000 -$100,000 B 20.00% 16.00% 1.45 -$40,000 -$60,000 -$110,000 8.00% 0.90 E $79,000 $19,000 15.00% 1.32 F $126,500 $16,500 11.00% 1.15 Ranking by NPV Project Initial Investment PV of Inflows NPV IRR PI Investment NPV -$100,000 -$70,000 -$80,000 $145,000 $45,000 $42,000 $20,000 $100,000 $45,000 $87,000 16.00% 1.45 $112,000 $100,000 20.00% 1.60 $170,000 A 12.00% 1.25 $250,000 $107,000 -$60,000 -$110,000 -$40,000 $79,000 $126,500 $36,000 E $19,000 15.00% 1.32 $16,500 -$4,000 F 11.00% 1.15 D 8.00% 0.90 Ranking by IRR or PI Project Initial Investment PV of Inflows NPV IRR PI Investment NP -$70,000 -$100,000 -$60,000 $112,000 $145,000 $42,000 $45,000 $19,000 $70,000 $42,000 $87,000 $106,000 B 20.00% 1.60 $170,000 $230,000 16.00% 1.45 $79,000 $100,000 $126,500 E 15.00% 1.32 -$80,000 -$110,000 $20,000 $16,500 -$4,000 A 12.00% 1.25 11.00% 1.15 D -$40,000 $36,000 8.00% 0.90
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
Related questions
Question
Suppose the capital budget was $100,000. What is the NPV of the best project(s)?
Transcribed Image Text:WACC=
10.00% Fixed Budget =
$250,000
Project
Initial Investment PV of Inflows NPV
IRR
PI
-$80,000
-$70,000
$100,000
$112,000
$20,000
$42,000
A
12.00%
1.25
B
20.00%
1,60
-$100,000
-$40,000
$145,000
$36,000
$79,000
$45,000
-$4,000
16.00%
1.45
8.00%
0.90
-$60,000
-$110,000
$19,000
$16,500
15.00%
1.32
F
$126,500
11.00%
1.15
Ranking by NPV
Investment NPV
$100,000
Project
Initial Investment PV of Inflows NPV
IRR
PI
C
-$100,000
$145,000
$45,000
16.00%
1.45
$45,000
-$70,000
-$80,000
-$60,000
$42,000
$20,000
$87,000
$107,000
$112,000
$170,000
$250,000
20.00%
1.60
A
$100,000
12.00%
1.25
$79,000
$19,000
15.00%
1.32
-$110,000
-$40,000
F
$126,500
$16,500
11.00%
1.15
$36,000
-$4,000
8.00%
0.90
Ranking by IRR or PI
Project
Initial Investment PV of Inflows NPV
IRR
PI
Investment NPV
$42,000
$70,000
$170,000
$230,000
-$70,000
-$100,000
-$60,000
-$80,000
-$110,000
-$40,000
$42,000
$87,000
$106,000
$112,000
20.00%
1.60
$145,000
$79,000
$45,000
$19,000
16.00%
1.45
E
15.00%
1.32
$100,000
$20,000
12.00%
1.25
$126,500
$36,000
$16,500
11.00%
1.15
-$4,000
8.00%
0.90
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