Beruflich Dokumente
Kultur Dokumente
12-2
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-3
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-4
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-5
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
r
)
t 0
N
12-6
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
Example
Projects well examine:
Year
0
1
2
3
Cash Flow
L
S
-100
-100
10
70
60
50
80
20
CF
0
-60
10
60
CFt
-100
10
60
80
PV of CFt
-$100.00
9.09
49.59
60.11
NPVL =$ 18.79
CFt
-100
70
50
20
PV of CFt
-$100.00
63.64
41.32
15.02
NPVS= $ 19.98
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
IRR)
t 0
N
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-13
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
NPV Profiles
NPVL
$50
33
19
7
(4)
NPVS
$40
29
20
12
5
12-15
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
Independent Projects
NPV and IRR always lead to the same accept/reject
decision for any given independent project.
NPV ($)
IRR > r
and NPV > 0
Accept.
r > IRR
and NPV < 0.
Reject.
r = 18.1%
IRRL = 18.1%
r (%)
12-16
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
NPV
L
If r > 8.7%:
NPVS >
NPVL ,
IRRS > IRRL
S
NO
CONFLICT
r
8.7
r
IRRL
%
IRRs
12-17
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-18
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-19
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-21
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
Calculating MIRR
0
10%
-100.0
10.0
60.0
80.0
MIRR = 16.5%
66.0
12.1
158.
1TV
10%
100.
PV
0
outflows
10%
$158.1
$10 =
(1 + MIRRL)3
0
MIRRL = 16.5%
inflows
Excel: =MIRR(CF0:CFn,Finance_rate,Reinvest_rate)
We assume that both rates = WACC.
12-22
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-23
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
12-24
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
Calculating Payback
Project Ls Payback Calculation
0
CFt
-100
10
60
80
Cumulative
-100
-90
30
50
PaybackL
=30
2 + 80
= 2.375 years
PaybackS
= 1.600 years
12-25
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
Strengths
12-26
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
10%
10
60
80
60.1
1
18.79
CFt
-100
PV of CFt
-100
9.09
49.59
Cumulative
-100
-90.91
-41.32
60.1 /
1
= 2.7
12-27
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
WACC = 10%
-800
1
5,000
2
-5,000
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
Multiple IRRs
NPV
IRR2 = 400%
450
0
-800
100
400
WACC
IRR1 = 25%
12-29
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
Result: 2 IRRs.
12-30
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.
2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a
publicly accessible website, in whole or in part.