Explore BrainMass

Explore BrainMass

    Key Financial Metrics- payback period, NPV, IRR, MIRR

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

    Calculate for a company's CFO, key financial metrics for this capital budgeting project. These key metrics must include payback period, net present value, internal rate of return and modified rate of return for a proposed capital budgeting project. Describe what each of these metrics tells us.

    Key Financial Data for BCD Company Project

    Project's discount rate 10%

    Time Period (in years)
    ______________0____________1______________2____________3____
    Cash out ($10,000)
    Cash in $7,500 $7,500 $7,500

    - assume cash flows occur at the beginning of the period
    (year 1 cash flow occurs 12 months after the initial investment)

    Can you explain this to me in layman's terms so that I may understand the concept.

    © BrainMass Inc. brainmass.com June 3, 2020, 5:50 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/key-financial-metrics-payback-period-npv-irr-mirr-39694

    Solution Summary

    The solution calculates key financial metrics ( payback period, net present value, internal rate of return and modified rate of return) for a capital budgeting project and describe what each of these metrics is.

    $2.19

    ADVERTISEMENT