A project costs €10 000 today and returns €4 000 at the end of each year for 4 years. The required rate of return is 8%. Find the profitability index PI.
NPV & IRR worksheet with answers
A project costs €25 000 today and returns €11 500 at the end of each year for 3 years. The required rate of return is 6%. Find the net present value NPV.
An investment of €75 000 gives these cash flows at the end of years 1 to 3: €20 000, €17 000, €28 000. The cost of capital is 8%. Find the net present value NPV.
An investment of €75 000 gives these cash flows at the end of years 1 to 4: €17 000, €17 000, €31 000, €21 000. The cost of capital is 7.000000000000001%. Find the net present value NPV.
A project costs €20 000 and returns €8 500, €13 500, €8 000 at the end of years 1 to 3. Find its internal rate of return IRR in percent.
A project costs €25 000 and returns €12 000, €15 000 at the end of years 1 to 2. Find its internal rate of return IRR in percent.
Answer key
- 1. PI = 1.325
- 2. NPV = 5740 €
- 3. NPV = −19679 €
- 4. NPV = −2938 €
- 5. IRR = 23.44 %
- 6. IRR = 5.093 %
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