Dinsmore artists international is in the business of managing singers
Net Present Value: The NPV for each investment is calculated by subtracting the initial cost from the sum of all cash flows discounted at a given discount rate.
For Plane A: NPV = -$15,000 + ($10,000 x 0.9) + ($10,000 x 0.82) + ($10,000 x 0.74) = $2,268
For Plane B: NPV = -$12,500 + ($10,000 x 0.87) + ($10,000 x 0.75) + ($10,000 x 0.65)= $1125
Internal Rate of Return: The IRR is calculated by finding the discount rate that makes the NPV equal to zero. For Plane A this would be 23% while for Plane B it would be 25%.
Modified Internal Rate of Return: The MIRR is calculated using a different formula than that used to calculate IRR and takes into consideration both future cash inflows as well as outflows associated with financing costs on an annuity basis over time. For Plane A this would be 17% and for Plane B 19%.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
