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    FM Practical

    Uploaded by

    anishkhanna
    The document compares two projects, Project A and Project B, over 5 years based on NPV, IRR, and payback period. Project A has a higher NPV of Rs. 26,336.52, higher IRR of 20%, and a lower payback period of 3.1 years. Therefore, the document concludes that Project A should be chosen as the preferred project.

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    Download as XLSX, PDF, TXT or read online from Scribd

    FM Practical

    Uploaded by

    anishkhanna
    11 views7 pages
    The document compares two projects, Project A and Project B, over 5 years based on NPV, IRR, and payback period. Project A has a higher NPV of Rs. 26,336.52, higher IRR of 20%, and a lower payback period of 3.1 years. Therefore, the document concludes that Project A should be chosen as the preferred project.

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    FM PRACTICAL

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    The document compares two projects, Project A and Project B, over 5 years based on NPV, IRR, and payback period. Project A has a higher NPV of Rs. 26,336.52, higher IRR of 20%, and a lower payback period of 3.1 years. Therefore, the document concludes that Project A should be chosen as the preferred project.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    11 views7 pages

    FM Practical

    Uploaded by

    anishkhanna
    The document compares two projects, Project A and Project B, over 5 years based on NPV, IRR, and payback period. Project A has a higher NPV of Rs. 26,336.52, higher IRR of 20%, and a lower payback period of 3.1 years. Therefore, the document concludes that Project A should be chosen as the preferred project.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 7

    YEAR PROJECT A PROJECT B RATE 11%

    0 -100000 -100000
    1 32000 0 INITIAL CASH OUTFLOW
    2 30000 0
    3 32000 0
    4 35000 0
    5 45000 200000

    NPV ₹ 26,336.52 ₹ 18,690.27 ₹ 26,336.52

    IRR 20% 15%

    PAYBACK PERIOD
    PROJECT A
    CASH INFLOWS CUMILATIVE VALUE OF CASH INFLOWS CASH INFLOWS
    32000 32000 0
    30000 62000 0
    32000 94000 0
    35000 129000 0
    45000 174000 200000

    PAYBACK PERIOD 3YEARS+(6000/45000) PAYBACK PERIOD

    3.133333333

    PROJECT A WILL BE CHOOSEN AS IT HAS A HIGHER NPV, HIGHER IRR AND A LOWER PAYBACK PERIOD.
    0.11

    100000

    PROJECT B
    CUMILATIVE VALUE OF CASH INFLOWS
    0
    0
    0
    0
    200000

    WER PAYBACK PERIOD.


    Q3
    SALES(units) 25000
    interst per annum 30000
    selling price per unit 24
    tax rate 50%
    variable cost per unit 16
    no.of equity shares 10000
    fixed cost 80000

    sales 600000 BREAK EVEN POINT 240000


    (variable cost) 400000
    contribution 200000 EBIT 120000
    (fixed cost) 80000
    EBIT 120000 EPS 4.5
    (interest) 30000
    EBT 90000 OL 1.666667
    (tax rate) 45000
    EAT 45000 FL 1.333333
    Q5
    A LTD B LTD C LTD
    IRR 15% 10% 8%
    KE 10% 10% 10%
    EPS 10 10 10

    DIVIDEND PAYOUT RATIO 0 8

    A LTD B LTD C LTD


    DIVEDEND PAYOUT RATIO(DPR) 8 10 0
    DIVEDEND PAID 80 100 0
    PRICE PER SHARE (P) -250 11000 0
    10
    Q4

    X LTD
    12% DEBT 500000 EBIT 300000 300000
    (INTEREST) 60000 0
    ASSETS 1500000 EBT 240000 300000
    EARNING RATE 20% KE 18% 18%
    EBIT 300000 E(EQUITY) 1333333 1666667
    INTEREST 60000 D(DEBT) 500000 0
    V(VALUE OF COMPANY) 1833333 1666667
    KO 0.163636 0.18
    EBIT 300000 300000
    (INTEREST) 60000 0
    EBT 240000 300000
    KO 18% 18%
    V(VALUE OF COMPANY) 1666667 1666667
    D(DEBT) 500000 0
    E(EQUITY) 1166667 1666667
    KE 0.205714 0.18

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