Problem:
The after tax cash flow of B&F Chemical Corp. - a plant producing fertilizers - is as follows:
|
End of year
|
0
|
1
|
2
|
3
|
4
|
5
|
|
Cashflow, $106
|
-23
|
X
|
X
|
X
|
Y
|
X
|
The minimum attractive rate of return (MARR) for the company is z.
Determine:
- the future value of the cash flow at the end of year 5, if X = 12, Y= 8 and z = 8% quarterly compounding
- the value of X if the equivalent uniform annual value of the cash flow is $2,000,000, Y = 3 and z = 10% yearly compounding
- the payback period if X = 7 and Y=3
- the internal rate of return if X = Y = 5
- the external rate of return if X = Y = 4 and z = 12% yearly compounding
Additional Information:
The question belongs to Finance and it discusses about calculation of future value, annual value and payback period for a project.