Finance

[FRANCOP6762]

Using a 3.8% discount rate calculate the net value, Payback, profitability index, and IRR
Project 1; initial investment=520,000, cash inflows of 100,000 for 1-5 yrs, and 50,000 for 6-20 yrs.
Project 2; initial investment= 1,050,000, cash inflows of 400,000 for 1-3 yrs, 0 for 4-7 yrs and 250,000 for 8-10 yrs.
Project 3; 820,000, cash inflows 300,000 for 1-5 yrs, 0 for 6-9 yrs and 100,000 for 10 yr.
asuming a budject of 1,3000,000 what are recomendations
assuming a buget of 2,1000,000 what are recomendations.
help I do not even know how to figure this to understand what I am supposed to do. I am so lost

 

[JeffM]

Using a 3.8% discount rate calculate the net value, Payback, profitability index, and IRR
Project 1; initial investment=520,000, cash inflows of 100,000 for 1-5 yrs, and 50,000 for 6-20 yrs.
Project 2; initial investment= 1,050,000, cash inflows of 400,000 for 1-3 yrs, 0 for 4-7 yrs and 250,000 for 8-10 yrs.
Project 3; 820,000, cash inflows 300,000 for 1-5 yrs, 0 for 6-9 yrs and 100,000 for 10 yr.
asuming a budject of 1,3000,000 what are recomendations
assuming a buget of 2,1000,000 what are recomendations.
help I do not even know how to figure this to understand what I am supposed to do. I am so lost

Let's start at the beginning. You are to calculate four items for each project. (By the way, I suspect the first is "net present value," not "net value"). All four terms should be defined in your book or class notes. Do you understand the definitions? If not, what exactly do you not understand?