Explore BrainMass

Explore BrainMass

    Capital Budgeting

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Can someone help with the following question?

    The following is stream of expect cash flows from a project to replace an old sail boat with a new one. The new boat will cost $15,000 and will be good for 5 years. It will be traded-in for another boat at the end of its useful life. The following cash flows are expected:

    Year 1 $5000
    Year 2 $5000
    Year 3 $4000
    Year 4 $3000
    Year 5 $8000

    The RADR for this boat is $12%. Calculate the NPV, IRR (Using excel), payback period, discounted payback, PI and MIRR using the 12% at the reinvestment. The target payback is 5 years.

    © BrainMass Inc. brainmass.com March 4, 2021, 9:06 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/capital-budgeting-218133

    Solution Summary

    Excel file shows calculations of NPV, IRR (Using excel), payback period, discounted payback, PI and MIRR .

    $2.49

    ADVERTISEMENT