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Calculate payback methods, discounted payback methods, net present values, internal rate of return, and profitability index. Determine what Durango should do based on calculations.
Some help on Week 3 Discussion 2 Durango
Calculate payback methods, discounted payback methods, net present values, internal rate of return, and profitability index. Determine what Durango should do based on calculations.
YR Poofy Puffs
0 -24890000
1 12950000
2 ?
3 ?
4 ?
Poffy puffs payback method
initial outlay 24890000
(2950000 yr 1 + 10923000 yr 2) = 23873000
still need 1017000 from year 3 to payback initial outlay
1017000/8231000 =?
payback period = ?
Poofy puffs discounted payback method
PV = 1/(1+i)n
PV yr 0 = -24890000
yr 1 = 11772727.27
yr 2 = 9027272.73
yr 3 = ?
yr 4 =?
discounted payback period ?yrs
NPV = 31930455.57 (PV of yr 1, 2, 3, 4) - 24890000
NPV = ?
Profitability index = 31930455.57/24890000
Profitability index = ?
YR Filling Fiber
0 -13500000
1 7230000
2 8100000
3 ?
4 ?
Filling Fiber payback method
initial outlay 13500000
7230000 yr 1; need 6270000 from yr 2 to payback initial outlay
6270000/8100000 =?
payback period = ?
Filling Fiber discounted payback method
PV = 1/(1+i)n
PV yr 0 = -13500000
yr 1 = 6572727.27
yr 2 = 6694214.88
yr 3 =?
yr 4 =?
discounted payback period = ? yrs
NPV = 23328276.76 - 13500000
NPV = 9828276.76
Profitability index = 9828276.76/13500000
Profitability index =?
