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Bautista FinMan Final TP
Bautista FinMan Final TP
Bautista FinMan Final TP
1. Calculate the NPV below using formula approach. Show the solutions. Interpret the data. (17 points)
Computation:
NPVs = 11891% or 118.91
NPVt = 50497% or 504.97
NPVi = -10967% or - 109.67
Interpretation:
Project S and T are accepted if the project is independent, with the exception of project I, which does not exceed zero.
If the project is Mutually exclusive project T is accepted because it has a highest positive NPV
2.Get the Internal Rate of Return (IRR) for the above table using excel formula. (3 points)
Project S 0 1 2
Project T 0 1 2
Project I 0 1 2
Company S invests P500,000 in a project that is expected to save the company P100,000 each year.Consider another project t
company an incremental P50,000 each year for the next 10 years at P500,000. How long will it take to pay the investment bac
Company S invests P500,000 in a project that is expected to save the company P100,000 each year.Consider another project t
company an incremental P50,000 each year for the next 10 years at P500,000. How long will it take to pay the investment bac
3 4
400 700
3 4
600 800
3 4
400 300
w the solution.
ear.Consider another project that costs P200,000 with no associated cash savings that will make the
ake to pay the investment back for both projects? Which project is a better investment? (10 points)
year.Consider another project that costs P200,000 with no associated cash savings that will make the
take to pay the investment back for both projects? Which project is a better investment? (10 points)
riod is a superior investment.