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FM-Division D-Group16-Assignment1

The document outlines a financial analysis involving an initial investment of ₹1,000,000 with a 2% dividend yield and a 5% capital appreciation over a 5-year horizon. It calculates various financial metrics including future values, present values, payback period, net present value, and internal rate of return for a project with total costs of ₹500,000,000 and projected sales over 25 years. The analysis indicates a payback period of 3.85 years and a net present value of ₹346,367,713.96.

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34 views8 pages

FM-Division D-Group16-Assignment1

The document outlines a financial analysis involving an initial investment of ₹1,000,000 with a 2% dividend yield and a 5% capital appreciation over a 5-year horizon. It calculates various financial metrics including future values, present values, payback period, net present value, and internal rate of return for a project with total costs of ₹500,000,000 and projected sales over 25 years. The analysis indicates a payback period of 3.85 years and a net present value of ₹346,367,713.96.

Uploaded by

pranshubansal700
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Initial investment 1000000

dividend yield(%) 2%
Investment horizon(years) 5
capital appreciation(%) 5%
Discount rate(%) 7%

a) Annual dividend(annuity) 20000


Total dividend for 5 year 100000

b) Fv of annual dividends ₹ 115,014.78


c) Fv of initial investment ₹ 1,276,281.56
d) Total future value ₹ 1,391,296.34
e) PV of annual dividends ₹ 82,003.95
f) PV of future investment ₹ 909,971.12
g) Total PV ₹ 991,975.06
Problem 1 Problem 2
Initial investment(Total cost)

Annual sales for first 10 years


Annual sales for next(11-25) years
Depreciation of Initial investment/year(For next 10 years)

Required rate of return(Discount Rate)

1) Payback period for the project(years)


Return on Investment

2) Net Present Value


Internal rate of return
500000000

400000000
300000000
50000000

12%

3.85
313.00%

₹ 346,367,713.96
24.14%
Profit is 20% of sales(For first 10 years)+depreciation 20%
Profit is 17% of sales(For Next 11-25 years) 17%
0 year
1 year
2 year
3 year
4 year
5 year
6 year
7 year
8 year
9 year
10 year
11 year
12 year
13 year
14 year
15 year
16 year
17 year
18 year
19 year
20 year
21 year
22 year
23 year
24 year
25 year

Total
130000000
51000000
-500000000 without depreciation(for first 10 years)
130000000 1 year 80000000
130000000 2 year 80000000
130000000 3 year 80000000
130000000 4 year 80000000
130000000 5 year 80000000
130000000 6 year 80000000
130000000 7 year 80000000
130000000 8 year 80000000
130000000 9 year 80000000
130000000 10 year 80000000
51000000 11 year 51000000
51000000 12 year 51000000
51000000 13 year 51000000
51000000 14 year 51000000
51000000 15 year 51000000
51000000 16 year 51000000
51000000 17 year 51000000
51000000 18 year 51000000
51000000 19 year 51000000
51000000 20 year 51000000
51000000 21 year 51000000
51000000 22 year 51000000
51000000 23 year 51000000
51000000 24 year 51000000
51000000 25 year 51000000

2065000000 Total 1565000000

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