01-18-2013, 09:44 PM
(This post was last modified: 01-23-2013, 09:33 PM by █▓▒░(°Wajid Malik°)░▒▓█.)

Composed and solved by WAJID MALIK E.mail: [email protected]

one solution idea >>>>>>>>>>>>' cash inflow for a year = (revenue after depreciation) x (1-tax rate) + depreciation(add back)

= (6000000-3000000)*(1-35+3000000

=4950000

2nd year

growth=5%

6000000*1.05=6300000

cash inflow for a year = (revenue after depreciation) x (1-tax rate) + depreciation(add back)

= (6300000-3000000)*(1-35+3000000

=5145000

for 3rd year:

growth=6000000*(1.05)^2

cash inflow for a year = (revenue after depreciation) x (1-tax rate) + depreciation(add back)

= (6615000-3000000)*(1-35+3000000

=5350000

N SO ON........................

CALCULATE OF ALL 10 YEARS N THEN ADD ALL OF THE CASH INFLOWS AND DEDUCT INVESTMENT FROM IT TO GET

NET CASH FLOW .

2nd solution >>>>>>>>>>>>>>>>??????/

Solution:

Year

Cash flow

1st

4950000

2nd

5145000

3rd

5349750

4th

5564737.5

5th

5790475.375

6th

6027498.094

sum of cash flow of 5 years = 26799963

the difference between the ammounts = 30000000 - 26799963 = 3200037

to cover this ammount we take the cash flow of 6th year

= 3200037 / 6027498.94 * 365

3rd solituin >>>>>>>>>>>>>>>>>>>>>>>>>>

year Cash Flows

1 4,950,000

2 5,145,000

3 5,349,750

4 5,564,737

5 5,790,475

6 6,027,533

Sum of first five years cash flows are 26,799,962. so yet have to cover Rs.3,200,038. To cover this amount we have to take 6th year cash flows but they are much more so we have to calculate it exactly to Rs 30m. for this 3,200,038/6,027,533*365 = 194 days.

So our payback period is 5 years n 194 days or just over 5.5 years or 5 Years and 6 months.

4th solution >>>>>>>>>>>>>>>>>>>>

CALCULATE NPV BY USING FORMULA SEPARATELY FOR EACH N EVERY YEAR.

PV=CASH INFLOW/(1-R)^t

r=10%

t=t1,t2,t2,t4,......t10

FOR IST YAER:

pv=4950000/(1+0.10)^1

=4.5

FOR 2ND YAER:

=5.145/(1.1)^2

=4.25

N SO ON UPTO 10 YEAR

....

FOR 10TH YEAR

7100200/(1.1)^10

2730000

AFTER THIS SUM UP ALL THE VALUES TO GET PRESENT VALUE

NOW

NPV=PV-INVESTMENT

NPV=5460000

[size=xx-large] Note: these Assingment GDB solved by urself .

one solution idea >>>>>>>>>>>>' cash inflow for a year = (revenue after depreciation) x (1-tax rate) + depreciation(add back)

= (6000000-3000000)*(1-35+3000000

=4950000

2nd year

growth=5%

6000000*1.05=6300000

cash inflow for a year = (revenue after depreciation) x (1-tax rate) + depreciation(add back)

= (6300000-3000000)*(1-35+3000000

=5145000

for 3rd year:

growth=6000000*(1.05)^2

cash inflow for a year = (revenue after depreciation) x (1-tax rate) + depreciation(add back)

= (6615000-3000000)*(1-35+3000000

=5350000

N SO ON........................

CALCULATE OF ALL 10 YEARS N THEN ADD ALL OF THE CASH INFLOWS AND DEDUCT INVESTMENT FROM IT TO GET

NET CASH FLOW .

2nd solution >>>>>>>>>>>>>>>>??????/

Solution:

Year

Cash flow

1st

4950000

2nd

5145000

3rd

5349750

4th

5564737.5

5th

5790475.375

6th

6027498.094

sum of cash flow of 5 years = 26799963

the difference between the ammounts = 30000000 - 26799963 = 3200037

to cover this ammount we take the cash flow of 6th year

= 3200037 / 6027498.94 * 365

3rd solituin >>>>>>>>>>>>>>>>>>>>>>>>>>

year Cash Flows

1 4,950,000

2 5,145,000

3 5,349,750

4 5,564,737

5 5,790,475

6 6,027,533

Sum of first five years cash flows are 26,799,962. so yet have to cover Rs.3,200,038. To cover this amount we have to take 6th year cash flows but they are much more so we have to calculate it exactly to Rs 30m. for this 3,200,038/6,027,533*365 = 194 days.

So our payback period is 5 years n 194 days or just over 5.5 years or 5 Years and 6 months.

4th solution >>>>>>>>>>>>>>>>>>>>

CALCULATE NPV BY USING FORMULA SEPARATELY FOR EACH N EVERY YEAR.

PV=CASH INFLOW/(1-R)^t

r=10%

t=t1,t2,t2,t4,......t10

FOR IST YAER:

pv=4950000/(1+0.10)^1

=4.5

FOR 2ND YAER:

=5.145/(1.1)^2

=4.25

N SO ON UPTO 10 YEAR

....

FOR 10TH YEAR

7100200/(1.1)^10

2730000

AFTER THIS SUM UP ALL THE VALUES TO GET PRESENT VALUE

NOW

NPV=PV-INVESTMENT

NPV=5460000

[size=xx-large] Note: these Assingment GDB solved by urself .