Calculate the npv-irr and mirr, Finance Basics

Task:

  • Decide upon 2 mutual exclusive projects.
  • Calculate the income statement, balance sheet, and statement of cash flows for all year
  • Calculate the NPV, IRR, and MIRR.
  • Check if IRR and MIRR are consistent with the NPV for various rates of cost of capital.

Assumptions:

  • One project has a reinvestment in the middle of its productive life of 50% of the initial cost
  • Project length is at least 4 years
  • 30% annual growth of Revenues
  • Profit Margin 2% in t=0 (that might change over time)
  • Dividend is 0% of net income
  • You are operating at 100% capacity in year zero and thereafter
  • Initiating the investments will have some impact on net working capital
  • At least one of your balance sheet entries, such as inventory, should be forecasted based on a regression (utilize the attached historic data)
  • If you need additional financing, finance 40% with debt and 60% with equity
  • You will finance 40% of the asset with debt in either case
  • Taxes are 35%, cost of debt is 5% and cost of equity is 12%
  • Customers pay after 60 days
  • Suppliers are paid after 90 days
  • If you sell your assets in the final year you will incur an extraordinary gain
Posted Date: 3/8/2013 4:23:13 AM | Location : United States







Related Discussions:- Calculate the npv-irr and mirr, Assignment Help, Ask Question on Calculate the npv-irr and mirr, Get Answer, Expert's Help, Calculate the npv-irr and mirr Discussions

Write discussion on Calculate the npv-irr and mirr
Your posts are moderated
Related Questions
Selection of Remuneration Policy The alternative of a suitable remuneration policy through a company will depend, with another thing, on: 1. Cost: the extent to that the p

Pick a product of your choice and identify the stages of production

Working Capital Cycle The Concept of Working Capital/Cash Operating Cycle Working capital cycle refers to period such elapses between the payment for raw materials bought

jack needs to borrow $1000 for the next year. Bank south will give him the loan at 9%. Suncoast will give him the loan at 7% with a $50 loan orgination fee. First national will giv

ROS - Return on Sales (Profit Margin) The Average of the industry ROS was 5.18% for 2004, 4.41% for 2005, and 7.20% for 2006. The chart showed that ROS has been declined f

how much

Weaknesses of WACC as Discounting Rate WACC/Overall cost of capital has the following problems like a discounting rate as:  It can simply be used as a discounting

#what is an interest?

How often does the "on the run" tsy change?

In order to value a debt security correctly, we must understand the terms and conditions of debt securities precisely. These terms define the contractual rights of the debt securit