Calculate Future Value And Payback Period For A Project

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Question

The after tax cash flow of B&F Chemical Corp. - a plant producing fertilizers - is as follows:

End of year

0

1

2

3

4

5

Cashflow, $106

-23

X

X

X

Y

X

The minimum attractive rate of return (MARR) for the company is z.

Determine:

  • the future value of the cash flow at the end of year 5, if X = 12, Y= 8 and z = 8% quarterly compounding
  • the value of X if the equivalent uniform annual value of the cash flow is $2,000,000, Y = 3 and z = 10% yearly compounding
  • the payback period if X = 7 and Y=3
  • the internal rate of return if X = Y = 5
  • the external rate of return if X = Y = 4 and z = 12% yearly compounding

Summary

The question belongs to Finance and it discusses about calculation of future value and payback period for a project.

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