9. Create an Evaluation Summary indicating the NPV, IRR, PI, and Payback period of all options. Please see the PDF lecture notes or lecture video for the guide. 10. Based on the NPV, IRR, PI, and Payback period of each project option, what is the best option for the expansion of your business? Discuss your answer.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Answer 9-10
B. CAPITAL BUDGETING
Situation: Assume that you are planning to invest for the expansion of your business. You consider the
two projects: large expansion which costs PHP 1,100,000 and medium expansion which costs
PHP500,000. The discount rate is 8% annually. You are task to do the following. Also, you interpret your
result (for problem solving).
-nsion
4. Cal. --1 a.
5.
9. Create an Evaluation Summary indicating the NPV, IRR, PI, and Payback period of all options.
Please see the PDF lecture notes or lecture video for the guide.
10. Based on the NPV, IRR, PI, and Payback period of each project option, what is the best option for
the expansion of your business? Discuss your answer.
Project A
Large Expansion
Project B
Medium Expansion
Particulars
Initial Investment Outlay
PHP 1,100,000
PHP 500,000
Cash Inflows
PHP 100,000
PHP 120,000
PHP 150,000
Year 1
PHP 250,000
PHP 300,000
Year 2
Year 3
PHP 350,000
Year 4
PHP 400,000
PHP 170, 000
Transcribed Image Text:B. CAPITAL BUDGETING Situation: Assume that you are planning to invest for the expansion of your business. You consider the two projects: large expansion which costs PHP 1,100,000 and medium expansion which costs PHP500,000. The discount rate is 8% annually. You are task to do the following. Also, you interpret your result (for problem solving). -nsion 4. Cal. --1 a. 5. 9. Create an Evaluation Summary indicating the NPV, IRR, PI, and Payback period of all options. Please see the PDF lecture notes or lecture video for the guide. 10. Based on the NPV, IRR, PI, and Payback period of each project option, what is the best option for the expansion of your business? Discuss your answer. Project A Large Expansion Project B Medium Expansion Particulars Initial Investment Outlay PHP 1,100,000 PHP 500,000 Cash Inflows PHP 100,000 PHP 120,000 PHP 150,000 Year 1 PHP 250,000 PHP 300,000 Year 2 Year 3 PHP 350,000 Year 4 PHP 400,000 PHP 170, 000
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