Tutorial 07: Project Management

Question 1
Based on the following table, calculate the NPV if the discount rate is 10% and the project is completed
in year 0.
Question 2
Based on Question (1), calculate the ROI.
Question 3
Based on Question (1), calculate the payback period in months.
Question 4
Discuss the cost/benefit analysis measurements: NPV and ROI.

Question 5
Fill in the missing values and calculate the NPV, ROI and payback period. Use those measurements to
justify if you would recommend the project.
Extra

1. What is the NPV for project ABC?

2. What is the ROI for project ABC? (Rounded to 1 decimal place)
3. What is the payback period (in months) for project ABC?
(Rounded to 1 decimal place)
4. What is the NPV for project XYZ?
5. What is the ROI for project XYZ? (Rounded to 1 decimal
place)
6. What is the payback period (in months) for project XYZ?
(Rounded to 1 decimal place)
7. Based on a required rate of return of 20%, justify which
solution should be chosen.