Finance

Coursework 2

A) Picture attached

B) Assume there was no alternative use for the building over next 4 years. Now calculate the project's NPV, IR, MIRR and regular payback. Do these indicators suggest that the project should be accepted?

0 1 2 3 4

| | | | |

(260) 79.7 91.2 62.4 89.7

NPV = -$4.0. NPV is negative, do not accept.

IRR =

IRR = 9.3%. IRR is less than cost of capital, do not accept.

MIRR: 0 1 2 3 4

| | | | |

(260) 79.7 91.2 62.4 89.7

68.6

110.4

106.1

TERMINAL VALUE (TV) $374.8

PV OF TV $260

NPV $ 0

MIRR is less than cost of capital, do not accept.

PAYBACK:

YEAR CASH FLOW CUMULATIVE CASH FLOW

0 ($260.0) ($260.0)

1 79.7 (180.3)

2 91.2...