Question

more Accounting than statistics but I have a problem with ARR, IRR, NPV and a few others...anyone interested?

Answer 1

Maybe? Please post.

Answer 2

Possible Location
Mumbai
Bangalore
Initial cash outlay
$5,000,000
$2,800,000
Useful life
20 years
20 years
Net cash inflows excluding depreciation
$1,100,000
$860,000
The cost of capital
9%
9%
Tax rate
40%
40%
The Assignment:
Part 1: Prepare a spreadsheet using Excel or a similar program in which you compute the following for each proposed location:
Accounting rate of return on investment
Payback
Net present value
Internal rate of return

Answer 3

My opinion, just pop this into an Excel spreadsheet and it's fine.

Answer 4

I have tried, I'm just not understanding the concepts. It seems the math is tripping me up. When I consider the answers requested, I think my Net Present Value for period 1 is the 5000000 and/or 2800000. Then period 1 which is equal to 5 years is discounted by the cost and tax. Do you feel I'm on the right track?