 EVEN NET CASH INFLOWS An equipment costing P800,000 will produce annual net cash

inflows of P250,000. At the end of its useful life of 5 years, the equipment will have a P20,000
residual value. Additional working capital of P200,000 is needed. The desired rate of return is
14%. Determine the net present value.  UNEVEN NET CASH INFLOWS An equipment costing
P680,000, with a residual value of P8,000 at its useful life of five years, is expected to bring the
following net of cash inflows: 1st year 350,000 2nd year 250,000 3rd year 150,000 4th year
100,000 5th year 50,000 Determine the net present value using a discount rate of 12%.
PROFITABILITY INDEX Profitability Index = PVCI / COI Millennium Corporation has P12 million
available money for investment. It has already evaluated several project proposals and now
considers the following acceptable projects with following data: Project COI PVCI NPV A
5,000,000 5,500,000 500,000 B 6,000,000 6,900,000 900,000 C 4,000,000 4,850,000 850,000 D
3,000,000 3,470,000 470,000 Which project should the company invest? THE INTERNAL RATE
OF RETURN Present value of cash inflows = Cost investment Net present value = Zero
Profitability index = 1.00  EVEN NET CASH INFLOWS Twin Towers Company has the
opportunity to buy a new equipment at P1 million. The machine is estimated to have useful life
of 4 years, no residual value and will yield an annual cash inflow after tax of P375,000 during its
economic life. The company’s rate of return is 14%. Determine the time adjusted rate of return.
 UNEVEN NET CASH INFLOWS An equipment costing P2,800,000 with P100,000 salvage value
at the end of five years is expected to bring in the following cash inflows, net of tax: 1st year
1,200,000 2nd year 950,000 3rd year 800,000 4th year 600,000 5th year 500,000 Determine the
discounted cash flow rate of return. IRR vs. Cost of Capital High Clouds Corporation is analyzing
two project capital investments with the following data: Project 1 Project 2 Annual cash inflows
P4 million P5 million Life in years 5 5 Cost of capital 10% 10% Internal rate of return 14% 8