Payback Period
A construction engineer plans on investing 200,000 in a new cement-mixing machine and estimates that it will generate about 50,000 in annual cash flow. Calculate the payback period for the machine
200,000 / 50,000 = 4 years
A donut shop gets started with a 100,000 investment, the shop starts to make 20,000 a year, whats the ARR
(20,000/100,000) x 100 = 20%
a project to build a parking garage is happening for 300k. this is the cashflow in: 130k, 90k, 60k, 100k, 80k
Take into account its discount factor: 6%
(0.9434, 0.8900, 0.7921, 0.7473)
$460,000—>$392,108.37
A man takes out a loan to buy a store. The investment was 200k. The store does well, this is year by year growth: 80k in y1, 60k in y2, 100k in y3, 10k in y4.
80+60+100. 240-140= 100. 200-140= 60. 60/100 is 60% into the year. 60% into the year is 219 days or 7 months and 10 days.
A Shop gets a store expansion. The initial investment for this is $250,000.
This is the return each year:
Y1: 40k
Y2: 80K
Y3: 100K
Y4: 90K
Y5: 70K
40+80+100+90+70/5= 76K/250K= 30.4%
Consider an investment project that costs 250,000 and produces net cash flows over the next four years as follows: 50,000, 100,000, 150,000, 125,000.
Calculate the net present value at a discount factor of 8% (0.9259, 0.8573, 0.7938, 0.7350)
342970-250000 = 92970
Another construction engineer aims to invest 300,000 in a new timber-cutting machine. The machine is expected to generate the following cash flows in the first four years: 60,000, 80,000, 100,000, 120,000. Calculate the payback period for the machine.
you miiiight have to make a table im sorry
60,000 / 120,000 X 12 months = 6 months
3 years and 6 months
A business is considering purchasing a new commercial photocopier at a cost of 150,000. It expects the following revenue streams for the next five years: 30,000, 50,000, 75,000, 90,000, 100,000. Calculate its ARR
(345,000 - 150,000) / 5 = 39,000
39,000 / 150,000 = 26%
Consider an investment project that costs 500,000 and produces net cash flows over the next four years as follows: 100,000, 200,000, 300,000, 250,000.
Calculate the net present value at a discount factor of 8% (0.9259, 0.8573, 0.7938, 0.7350)
685,940 - 500,000 = 185,940