Running Head: INVESTMENT APPRAISAL1Investment AppraisalNameCourseDateINVESTMENT APPRAISAL2IntroductionThere are many techniques of appraising the feasibility of a project before the finaldecision of making the investment is made. Among the major types of investment appraisaltechniques are payback period, modified payback period, IRR, NPV, profitability index, currentyield, YTM, and YTC. This assignment reviews the two investment projects provided usingthese techniques to provide an opinion on whether they are viable.Investment AYearCash FlowPV$1 = 1/(1 + i)n012345678($5,000,000)$1,500,000$1,500,000$1,500,000$1,500,000$1,500,000$1,500,000$2,000,000-1.00000.81970.67190.55070.45140.37000.30330.2486DiscountedCash FlowCF x PV$1$1,229,550$1,007,850$826,050$677,100$555,000$454,950$372,900CumulativeDiscountedCash Flow($5,000,000)-$3,770,450$2,762,600-$1,936,550$1,259,450$704,450$249,500$123,400NPV NPV = C x {(1 - (1 + R)-T) / R} Initial InvestmentNPV = (C for Period 1 / (1 + R)1) + (C for Period 2 / (1 + R)2) ... (C for Period x / (1 + R)x) Initial Investment.WhereC = expected cash flow per period,R = required rate of returnT = Time taken by the project to generate income.INVESTMENT APPRAISAL3NPV = $1,500,000/ (1 + 0.12)1} + {$1,500,000/ (1 + 0.122} + {$1,500,000/ (1 + 0.123} +{$1,500,000/ (1 + 0.124} + {$1,500,000/ (1 + 0.12555}+ {$2,000,000/ (1 + 0.126} +{$1,500,000/ (1 + 0.127} - $ ...
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