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Project No 1 DCF 2 DCF 3 DCF 4 DCF 5 Initial Investment: Exhibit 1 Project Free Cash Flows (Dollars in Thousands)

The document summarizes the cash flows and financial metrics for 8 potential projects over a 15 year period using discounted cash flow analysis. Project 3 has the highest net present value and internal rate of return, followed by Projects 5 and 1. Based on the different metrics calculated, the ranking of project attractiveness varies depending on the metric used for evaluation.

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63 views5 pages

Project No 1 DCF 2 DCF 3 DCF 4 DCF 5 Initial Investment: Exhibit 1 Project Free Cash Flows (Dollars in Thousands)

The document summarizes the cash flows and financial metrics for 8 potential projects over a 15 year period using discounted cash flow analysis. Project 3 has the highest net present value and internal rate of return, followed by Projects 5 and 1. Based on the different metrics calculated, the ranking of project attractiveness varies depending on the metric used for evaluation.

Uploaded by

jk kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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EXHIBIT 1

Project Free Cash Flows (dollars in thousands) Discount Rate


Re-invest Rate
Project No 1 DCF 2 DCF 3 DCF 4 DCF 5
Initial investment (2,000) ($2,000) ($2,000) ($2,000) ($2,000)
Year 1 330 300 1666 1,515 0 160 145 280
2 330 273 334 276 0 200 165 280
3 330 248 165 124 0 350 263 280
4 330 225 0 395 270 280
5 330 205 0 432 268 280
6 330 186 0 440 248 280
7 330 169 0 442 227 280
8 1,000 467 0 444 207 280
9 0 446 189 280
10 0 448 173 280
11 0 450 158 280
12 0 451 144 280
13 0 451 131 280
14 0 452 119 280
15 10,000 2,394 -2,000 (479) 280
Sum of cash-flow
benefits $3,310 $2,073 $2,165 $1,915 $10,000 $2,394 $3,561 $2,707 $4,200
Excess of cash flow
over initial investment $1,310 $73 $165 ($85) $8,000 $394 $1,561 $707 $2,200
Ranking as per DCF 6 8 2 1
Ranking as per Cash Flow 5 8 1 4 2
IRR 11% 6% 11% 12% 11%
Rating as per IRR 4 8 1 3 5
NPV 73.09 (85.45) 393.92 707.01 129.70
Ranking as per NPV 6 8 2 1 5
MIRR 8.11 5.00 0.11 10.30 10.72
Ranking as per MIRR 3 5 7 2 1
Profitability Index 1.04 0.96 1.20 1.11 1.06
Rankink as per PI 6 8 1 2 5

4.606885 1.27368 15 5.1575 6.278933

237
Discount Rate 10%
Re-invest Rate 15% (assumed)
DCF 6 DCF 7 DCF 8 DCF
($2,000) ($2,000) ($2,000)
255 2200 2,000 1200 1,091 -350 (318)
231 900 744 -60 (50)
210 300 225 60 45
191 90 61 350 239
174 70 43 700 435
158 1,200 677
144 2,250 1,155
131
119
108
98
89
81
74
67

$2,130 $2,200 $2,000 $2,560 $2,165 $4,150 2,183

$130 $200 $0 $560 $165 $2,150 183


5 7 4 3
7 6 3
10% 15% 11%
7 2 6
0.00 165.04 182.98
7 4 3
0.10 7.38 2.10
8 4 6
1.00 1.08 1.09
7 4 3

1 1.71724 6.8684766

237
1 2 3 4 5 6 7
Initial investment (2,000) ($2,000) ($2,000) ($2,000) ($2,000) ($2,000) ($2,000)
1 330 1666 0 160 280 2200 1200
2 330 334 0 200 280 900
3 330 165 0 350 280 300
4 330 0 395 280 90
5 330 0 432 280 70
6 330 0 440 280
7 330 0 442 280
8 1,000 0 444 280
9 0 446 280
10 0 448 280
11 0 450 280
12 0 451 280
13 0 451 280
14 0 452 280
15 10,000 -2,000 280
Sum of cash-flow $3,310 $2,165 $10,000 $3,561 $4,200 $2,200 $2,560
Benefits
Excess of cash flow Over $1,310 $165 $8,000 $1,561 $2,200 $200 $560
Initial Investment
8 1 2 3 4 5
($2,000)
-350 0.14 0.79 - 0.07 0.12
-60 0.26 0.29 - 0.15 0.22
60 0.36 0.19 - 0.35 0.30
350 0.43 - - 0.48 0.36
700 0.49 - - 0.60 0.41
1,200 0.54 - - 0.67 0.45
2,250 0.57 - - 0.71 0.47
1.80 - - 0.74 0.49
- - - 0.76 0.50
- - - 0.78 0.51
- - - 0.78 0.51
- - - 0.77 0.50
- - - 0.76 0.50
- - - 0.75 0.48
- - 15.00 (3.22) 0.47
$4,150 NPV 2,073.09 1,914.55 2,393.92 2,228.22 2,129.70

$2,150 4.61 1.27 15.00 5.16 6.28

4 2 8 5 6
4 2 8 4 7
6 7 8

1.00 0.50 (0.15)


- 0.69 (0.05)
- 0.31 0.06
- 0.11 0.44
- 0.10 1.00
- - 1.86
- - 3.70
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
2,000.00 2,165.04 2,182.98

1.00 1.72 6.87

1 3 7
1 2 4

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