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I Putu Gede Geo Rama Bhujangga E1700869 Inter 17 Answer For Tutorial 4

Based on a financial analysis of a project, the student does not recommend investing because the ROI is only 44% and payback occurs in year 3, which is a long time to wait for small benefits. NPV stands for net present value, which is a method to determine the current value of all future cash flows from a project including initial capital. ROI stands for return on investment and is a percentage that represents the net value received from an investment over time. Based on calculations, the student recommends project one over project two because project one has a higher ROI and NPV, meaning it is more profitable.

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25 views2 pages

I Putu Gede Geo Rama Bhujangga E1700869 Inter 17 Answer For Tutorial 4

Based on a financial analysis of a project, the student does not recommend investing because the ROI is only 44% and payback occurs in year 3, which is a long time to wait for small benefits. NPV stands for net present value, which is a method to determine the current value of all future cash flows from a project including initial capital. ROI stands for return on investment and is a percentage that represents the net value received from an investment over time. Based on calculations, the student recommends project one over project two because project one has a higher ROI and NPV, meaning it is more profitable.

Uploaded by

candra brata
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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I Putu Gede Geo Rama Bhujangga

E1700869
Inter 17
Answer for Tutorial 4

Task 1
write a paragraph explaining whether you would recommend investing in this project, based on
your financial analysis.
Based on the financial analysis that I have to do for one project, I do not recommend
investing in this project because of several factors, the first is the return on investment (ROI) which
is quite small at around 44%, then the project is spread over four years and payback the new period
occurred in year 3 where this is a long time to invest just to get benefits that are not so big.

Task 2 Answer
what does NPV stand for?
NPV is stand for Net Present Value, is a method used to determine the current value of all
future cash flows generated by a project, including the initial capital investment. It is widely used
in capital budgeting to establish which projects are likely to turn the greatest profit.

What is the NPV formula?


The formula for NPV varies depending on the number and consistency of future cash flows. If
there’s one cash flow from a project that will be paid one year from now, the calculation for the
net present value is as follows:
NPV=Today’s value of the expected cash flows−Today’s value of invested cash

Task 3 Answer
what does ROI stand for?

ROI Stand for Return on Investment is a percentage that represents the net value received from an
investment over a given period of time.
What is the ROI formula?

The Formula Of ROI is

ROI = total benefits - total costs (return) / the total costs (investment).

Task 4 Answer (Part 2)


Based on your calculations, which of the two projects would you recommend?
Based on the results of financial analysis calculations from project one and two projects
that I recommend are project one, both of the two projects have a payback year in the same year,
namely year 3, but project one I recommend because project one has a greater ROI and NPV from
project two, which means project one is more profitable

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