MAC3702 ASSIGNMENT 1 SEMESTER 1 OF 2023 EXPECTED ANSWERS

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, 1)
Payback period
Year Cashflow Balance
0 -200 -200
1 40 -160
2 60 -100
3 80 -20
4 100 80

3 years 2.4 months


2) Discounted payback period


Discounte
Year Cashflow Discount @9 % d Balance
cashflow
0 -200 1 -200 -200
1 40 0.917431193 36.69725 -163.3028
2 60 0.841679993 50.5008 -112.802
3 80 0.77218348 61.77468 -51.02727
4 100 0.708425211 70.84252 19.81525
5 120 0.649931386 77.99177 97.80701

3 years 8.643499 months


Year Cashflow Discount @12%
0 -200 1 -200
1 40 0.892857143 35.71429
2 60 0.797193878 47.83163
3 80 0.711780248 56.94242
4 100 0.635518078 63.55181
5 120 0.567426856 68.09122
NPV 72.13137
272.1314




Year Cashflow Discount @25%
0 -200 1 -200
1 40 0.8 32
2 60 0.64 38.4
3 80 0.512 40.96
4 100 0.4096 40.96
5 120 0.32768 39.3216
NPV -8.3584



12% 72.13137 (25%-12%)
72.13137+8.3584

23.65%

5)
Profitability Index =present value of future cashflows/Initial investment

272.1314/200

1.360657