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    qaseh's Avatar
    qaseh Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Dec 30, 2011, 09:35 PM
    Sample question of net present value?
    Abe Sdn Bhd is trying to select the best investment from among 3 alternatives. Each alternative involve are initial outlay of RM100,000. Their cash flows are return for each projects are as follows:

    year project A project B project C
    1 RM 10,000 RM 50,000 RM 0
    2 RM 20,000 RM 40,000 RM 0
    3 RM 30,000 RM 30,000 RM 450,000
    4 RM 40,000 RM 0 RM 55,000
    5 RM 50,000 RM 0 RM 60,000

    A)Evaluate and lank each alternative based on:
    1.payback period.
    2.Net Present Value, use 10% discounted rate.

    B)Using interpolation calculate (IRR)for the best alternative in question A(1).

    HELP ME ANSWER THIS QUESTION,PLEASE... =)
    Unknown008's Avatar
    Unknown008 Posts: 8,076, Reputation: 723
    Uber Member
    		  
    #2

    Dec 31, 2011, 10:54 AM
    Do you know what is payback period?

    Do you know how to find the NPV of an investment given discounted rate?

    For the last part, you will first have to find the NPV of each project with another discounted rate. Then with two rates and two NPVs for each, you will be able to get each one's IRR.
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