- You are considering investing in a business. The business will cost $60,000 and require another $10,000 in immediate renovations. The business is expected to return $20,000 per year for 4 years. The company requires a 10% rate of return.
(a) Calculate the payback for the business
(b) Calculate the NPV for the Business
(c) Calculate the Internal rate of return
Using The BAII Plus for Cash Flows
- You are considering investing in a business. The business is expected to cost $60,000 and require another $10,000 in immediate renovations. The business is expected to return $20,000 per year for 4 years and then $40,000 after the fifth year. The company requires a 10% rate of return.
(a) Calculate the payback for the business
(b) Calculate the NPV for the business
(c) Calculate the Internal rate of return
- A company is considering launching a new product. The initial start-up costs will be $100,000 and the product will provide returns of $40,000 in year 1, $40,000 in year 2 and $31,757.60 in the third year.
(a) Calculate the NPV using a MARR of 5%
(b) Calculate the NPV using a MARR of 7%
(c) Calculate the NPV using a MARR of 6%
(d) Calculate the IRR of the project.
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