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Free Example of Project Evaluation Computation Essay

One of the most important functions or duties of a finance manager is to evaluate the project for the organization which ultimately increases the shareholder’s equity for the company. Project management sometimes referred as the project evaluation has been the major of concern for almost every organization. Inevitably, project evaluation is a tough job and due to its complexity a large number of people hire exceptional professionals to calculate and evaluate the best possible project for them.

In this short report, we will seek the answer of different project management questions. Before go in the details, one must have a very good idea regarding the terminology we will use throughout this paper, when we calculate the projects.

NPV = Net Present Value, In finance, the net present value (NPV) or net present worth (NPW) of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows

MARR: In business and engineering, the minimum acceptable rate of return, often abbreviated MARR, or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other projects. A synonym seen in many contexts is minimum attractiverate of return.

Now let’s start the analysis

Question-1

Ans-1)

The analytical sheet are mentioned below of all the projects,

Project 1

Life = 10 Years

Inflow of Earnings

Net Present Value

 

 

 

1

-870,000

 

2

700,000

636363.64

3

700,000

578512.40

4

700,000

525920.36

5

700,000

478109.42

6

700,000

434644.93

7

700,000

395131.75

8

700,000

359210.68

9

700,000

326555.17

10

700,000

296868.33

 

 

4031316.67

 

 

 

Project Feasibility Positive NPV

 

3161316.7

IRR

 

80%

 

 

 

 

 

 

Project 2

Life = 50 Years

Inflow of Earnings

Net Present Value

 

 

 

1

-830,000

 

2

700,000

636363.64

3

700,000

578512.40

4

700,000

525920.36

5

700,000

478109.42

6

700,000

434644.93

7

700,000

395131.75

8

700,000

359210.68

9

700,000

326555.17

10

700,000

296868.33

11

500000

192771.64

12

500000

175246.95

13

500000

159315.41

14

500000

144832.19

15

500000

131665.63

16

500000

119696.02

17

500000

108814.57

18

500000

98922.33

19

500000

89929.39

20

500000

81754.00

21

500000

74321.81

22

500000

67565.29

23

500000

61422.99

24

500000

55839.08

25

500000

50762.80

26

500000

46148.00

27

500000

41952.73

28

500000

38138.84

29

500000

34671.67

30

500000

31519.70

31

500000

28654.28

32

500000

26049.34

33

500000

23681.22

34

500000

21528.38

35

500000

19571.26

36

500000

17792.05

37

500000

16174.59

38

500000

14704.17

39

500000

13367.43

40

500000

12152.21

41

500000

11047.46

42

500000

10043.15

43

500000

9130.14

44

500000

8300.12

45

500000

7545.57

46

500000

6859.61

47

500000

6236.01

48

500000

5669.10

49

500000

5153.72

50

500000

4685.20

 

 

6104952.73

 

 

 

Project Feasibility Positive NPV

 

5274952.7

IRR

 

84%

 

 

 

 

 

 

Project 3

Life = 50 Years

Inflow of Earnings

Net Present Value

 

 

 

1

-760,000

 

2

700,000

636363.64

3

700,000

578512.40

4

700,000

525920.36

5

700,000

478109.42

6

700,000

434644.93

7

700,000

395131.75

8

700,000

359210.68

9

700,000

326555.17

10

700,000

296868.33

11

1400000

539760.61

12

1400000

490691.46

13

1400000

446083.14

14

1400000

405530.13

15

1400000

368663.76

16

1400000

335148.87

17

1400000

304680.79

18

1400000

276982.54

19

1400000

251802.31

20

1400000

228911.19

21

1400000

208101.08

22

1400000

189182.80

23

1400000

171984.36

24

1400000

156349.42

25

1400000

142135.84

26

1400000

129214.40

27

1400000

117467.63

28

1400000

106788.76

29

1400000

97080.69

30

1400000

88255.17

31

1400000

80231.97

32

1400000

72938.16

33

1400000

66307.42

34

1400000

60279.47

35

1400000

54799.52

36

1400000

49817.74

37

1400000

45288.86

38

1400000

41171.69

39

1400000

37428.81

40

1400000

34026.19

41

1400000

30932.90

42

1400000

28120.82

43

1400000

25564.38

44

1400000

23240.35

45

1400000

21127.59

46

1400000

19206.90

47

1400000

17460.82

48

1400000

15873.47

49

1400000

14430.43

50

1400000

13118.57

 

 

9837497.64

 

 

 

Project Feasibility Positive NPV

 

9007497.6

IRR

 

92%

 

 

 

Project 4

Life = 50 Years

Inflow of Earnings

Net Present Value

 

 

 

1

-685,000

 

2

700,000

636363.64

3

700,000

578512.40

4

700,000

525920.36

5

700,000

478109.42

6

700,000

434644.93

7

700,000

395131.75

8

700,000

359210.68

9

700,000

326555.17

10

700,000

296868.33

11

3000000

1156629.87

12

3000000

1051481.70

13

3000000

955892.45

14

3000000

868993.14

15

3000000

789993.76

16

3000000

718176.15

17

3000000

652887.41

18

3000000

593534.01

19

3000000

539576.37

20

3000000

490523.97

21

3000000

445930.88

22

3000000

405391.71

23

3000000

368537.92

24

3000000

335034.47

25

3000000

304576.79

26

3000000

276887.99

27

3000000

251716.36

28

3000000

228833.05

29

3000000

208030.05

30

3000000

189118.23

31

3000000

171925.66

32

3000000

156296.05

33

3000000

142087.32

34

3000000

129170.29

35

3000000

117427.54

36

3000000

106752.31

37

3000000

97047.55

38

3000000

88225.05

39

3000000

80204.59

40

3000000

72913.26

41

3000000

66284.78

42

3000000

60258.89

43

3000000

54780.81

44

3000000

49800.74

45

3000000

45273.40

46

3000000

41157.64

47

3000000

37416.03

48

3000000

34014.58

49

3000000

30922.34

50

3000000

28111.22

 

 

16473133.03

 

 

 

Project Feasibility Positive NPV

 

15643133.0

IRR

 

103%

 

 

 

Project 4

Life = 50 Years

Inflow of Earnings

Net Present Value

 

 

 

1

-630,000

 

2

700,000

636363.64

3

700,000

578512.40

4

700,000

525920.36

5

700,000

478109.42

6

700,000

434644.93

7

700,000

395131.75

8

700,000

359210.68

9

700,000

326555.17

10

700,000

296868.33

11

4000000

1542173.16

12

4000000

1401975.60

13

4000000

1274523.27

14

4000000

1158657.52

15

4000000

1053325.02

16

4000000

957568.20

17

4000000

870516.54

18

4000000

791378.68

19

4000000

719435.16

20

4000000

654031.96

21

4000000

594574.51

22

4000000

540522.28

23

4000000

491383.89

24

4000000

446712.63

25

4000000

406102.39

26

4000000

369183.99

27

4000000

335621.81

28

4000000

305110.74

29

4000000

277373.40

30

4000000

252157.63

31

4000000

229234.21

32

4000000

208394.74

33

4000000

189449.76

34

4000000

172227.06

35

4000000

156570.05

36

4000000

142336.41

37

4000000

129396.74

38

4000000

117633.40

39

4000000

106939.45

40

4000000

97217.68

41

4000000

88379.71

42

4000000

80345.19

43

4000000

73041.08

44

4000000

66400.99

45

4000000

60364.53

46

4000000

54876.85

47

4000000

49888.04

48

4000000

45352.77

49

4000000

Code: Sample20

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