Please show all work including calculations and graph. Evaluate the following tw
ID: 2712805 • Letter: P
Question
Please show all work including calculations and graph.
Evaluate the following two cash flow streams using the PP, ROI, NPV, and IRR. Assume a MARR of 8%Plot a graph showing the relationship between the interest rate and the NPV. Provide an interpretation of your calculations and graph.
0
1
2
3
4
CF Project 1
-$98,024
$74,000
$28,000
$12,000
$8,000
CF Project 2
-$76,000
$26,000
$26,000
$26,000
$26,000
0
1
2
3
4
CF Project 1
-$98,024
$74,000
$28,000
$12,000
$8,000
CF Project 2
-$76,000
$26,000
$26,000
$26,000
$26,000
Explanation / Answer
Payback Period: (Payback Period = Initial Investment/Cash Inflow Per Period)
Project 1 – 1.858 Years
Project 2 – 2.923 Years
ROI % = (Return - Cost of investment) x 100
Cost of investment
Project 1 - 24.46%
Project 2 - 36.84%
NPV: {Net Period Cash Flow/(1+R)^T} - Initial Investment
Project 1 - $9.906.23
Project 2 - $10,115.30
IRR:
Project 1 - 14.9692%
Project 2 - 13.8437%
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