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CH 15

1. The document contains financial information for three projects: Mini SUV, Full SUV, and Wifi. 2. Based on the NPV and IRR calculations, Full SUV is the best project with an NPV of ₹260,000 and IRR of 16%. 3. Both projects are rejected as the IRR is not greater than the discount rate of 10%.

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palash
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18 views6 pages

CH 15

1. The document contains financial information for three projects: Mini SUV, Full SUV, and Wifi. 2. Based on the NPV and IRR calculations, Full SUV is the best project with an NPV of ₹260,000 and IRR of 16%. 3. Both projects are rejected as the IRR is not greater than the discount rate of 10%.

Uploaded by

palash
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
Download as xlsx, pdf, or txt
Download as xlsx, pdf, or txt
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CDMA G4 Wifi Rate 10%

-8 -12 -20
11 10 18
7.5 25 32
2.5 20 20
NPV ₹ 10.08 ₹ 32.78 ₹ 37.84

Rank 3 2 1
Mini SUV Full SUV Rate 10%
-450000 -800000
320000 350000
180000 420000
150000 290000
Payback Period 2 3
NPV 102366.64 260000 Full SUV is better
IRR 25% 16% Reject both as IRR is greater than discount rate
greater than discount rate
life 4 years
0 1 2 3 4
Cost 200000
Shipping 10000
Installation 30000
Total Cost 240000

Inventory 25000
Payable 5000
Working Capital 20000
Final Cost 260000

Sales 250000 250000 250000 250000


Salvage 25000
Operaring cost 125000 125000 125000 125000
Depreciable Rate 240000 33% 45% 15% 7%
Depreciation Value 79200 108000 36000 16800
Total 45800 17000 89000 133200

Tax 40% 18320 6800 35600 53280


Total after tax 27480 10200 53400 79920
Adding back depreciation -260000 106680 118200 89400 116720
CoC 10%

NPV ₹ 81,556.64
IRR 23.82%
life 4 years
0 1 2 3 4
Cost 200000
Shipping 10000
Installation 30000
Total Cost 240000

Inventory 25000
Payable 5000
Working Capital 20000
Final Cost 260000

Sales 325000 325000 325000 325000


Salvage 25000
Operaring cost 162500 162500 162500 162500
Depreciable Rate 240000 33% 45% 15% 7%
Depreciation Value 79200 108000 36000 16800
Total 83300 54500 126500 170700

Tax 40% 33320 21800 50600 68280


Total after tax 49980 32700 75900 102420
Adding back depreciation -260000 129180 140700 111900 139220
CoC 10%

NPV ₹ 152,878.61
IRR 35.07%
Operating cost 100
Sale Price 200
1250 25000 10% NPV
Base Level Unit Sales Salvage CoC Unit Sales Salvage CoC
-30% 875.00 17500.00 7.00% 10234.67 78483.08 104963.6
-20% 1000.00 20000.00 8.00% 34008.66 79507.6 96876.51
-10% 1125.00 22500.00 9.00% 57782.65 80532.12 89078.73
0 1250.00 25000.00 10.00% 81556.64 81556.64 81556.64
10% 1375.00 27500.00 11.00% 105330.6 82581.16 74297.47
20% 1500.00 30000.00 12.00% 129104.6 83605.68 67289.14
30% 1625.00 32500.00 13.00% 152878.6 84630.2 60520.26

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