Year Project 1 Present value Cumulative cash flow Project 2 Present value

0 10000 15000
1 4000 3636.36 3636.36 7000 6363.64
2 4000 3305.79 6942.15 5500 4545.45
3 4000 3005.26 9947.41 4000 3005.26

Payback period
Project 1 2.50
Project 2 2.63 Accept all projects as payback period less than
Project 3 2.38 desired 3 years.
Project 4 1.73

Discounted Payback period

Project 1 3.02 Reject these projects as discounted payback
Project 2 3.36125 period greater than desired 3 years.
Project 3 2.792 Accept these projects as discounted payback
Project 4 2.49 period lesser than desired 3 years.
Cumulative cash flow Project 3 Present value Cumulative cash flow Project 4 Present value
8000 18000
6363.64 3000 2727.27 2727.27 10000 9090.91 9090.91
10909.09 3500 2892.56 5619.83 11000 9090.91 18181.82
13914.35 4000 3005.26 8625.09 0 0.00 18181.82
Years Cash Flow Cumulative Cash flow Present value
0 -3600000 -3600000
1 500000 500000 438596.49
2 625000 1125000 480917.21
3 625000 1750000 421857.20
4 625000 2375000 370050.17
5 625000 3000000 324605.42
6 625000 3625000 284741.59
7 530000 4155000 211807.78
8 530000 4685000 185796.30
9 530000 5215000 162979.21
10 385000 5600000 103851.37
2985202.73
0.83
Payback Period 5.96
NPV -614797.268580124
Profitability Index 0.829222980949966

The project should not be selected as the project has negative NPV and Profitability Index less than 1.
ofitability Index less than 1.
Year A Present value Cumulative value B Present value Cumulative value
0 -100000 -100000
1 50000 45454.55 45454.55 10000 9090.91 9090.91
2 50000 41322.31 86776.86 10000 8264.46 17355.37
3 10000 7513.15 94290.01 50000 37565.74 54921.11
4 10000 6830.13 101120.14 30000 20490.40 75411.52
5 10000 6209.21 107329.36 100000 62092.13 137503.65

Payback Period
Project A 2
Project B 4
Project C 3

IRR
Project A 14%
Project B 20%
Project C 22%

NPV
Project A 7329.36
Project B 37503.65
Project C 34485.97

Ranking Payback Period IRR NPV

Rank 1 Project A Project C Project B
Rank 2 Project B Project B Project C
Rank 3 Project C Project A Project A
C Present value Cumulative value
-100000
10000 9090.91 9090.91
50000 41322.31 50413.22
40000 30052.59 80465.82
70000 47810.94 128276.76
10000 6209.21 134485.97
Year Project U Present value Project V Present value Project W Present value Project X
0 -2000000 -2500000 -2400000 -1750000
1 500000 471698.11 600000 550458.72 1000000 869565.21739 300000
2 500000 444998.22 600000 505008.00 800000 604914.93384 500000
3 500000 419809.64 600000 463310.09 600000 394509.73946 700000
4 500000 396046.83 600000 425055.13 400000 228701.29824 900000
5 500000 373629.09 600000 389958.83 200000 99435.34706 1100000
2106181.89 ### 2333790.76 ### 2197126.54 ###

PI
Project U 1.053091
Project V 0.933516
Project W 0.915469
Project X 1.017478

Project U can be selected based on higher PI value.

Present value

245901.63934
335931.20129
385494.82115
406259.1792
406999.17771
1780586.02