项目管理 Life+cycle+and+Organization.ppt

Net Present Value - Example Discount Factor = 1/((1+0.10+0.04)^0)=1 k= required rate of return p= Inflation Net Present Value - Example Discount Factor = 1/((1+0.10+0.04)^1)=0.8772 Net Present Value - Example Discount Factor = 1/((1+0.10+0.04)^2)=0.7695 Net Present Value - Example Discount Factor = 1/((1+0.10+0.04)^3)=0.6750 Net Present Value - Example Discount Factor = 1/((1+0.10+0.04)^4)=0.5921 Net Present Value - Example +ve good proj. Discount Factor = 1/((1+0.10+0.04)^4)=0.5921 k= required rate of return p= Inflation Selection Method – Internal Rate of Return The Internal Rate of Return (IRR) method asks the simple question: What rate of return will the project earn? It must meet some minimum threshold. Under this model the project must meet some rate applied to all projects under consideration. IRR is defined as: Where: ACFt = The annual after tax cash flow for time period t IO = The initial cash outlay n = The projects expected life IRR = The projects Internal Rate of Return t = Life of project Example Suppose that a project required an initial cash investment of $5000 and was expected to generate inflows of $2500, $2000, and $2000 for the next three years. What is the internal rate of return for this project? Solution: Answering this requires four steps: Pick an arbitrary discount rate and use it to determine the net present value of the stream of cash inflows. Compare the present value of the inflows with the initial investment; if they are equal, you have found IRR. If the present value is larger (or less than) than the initial investment, select a higher (or lower) discount rate for the computation. Determine the present value of the inflows and compare it with the initial investment. Continue to repeat steps 2-4 until you have determined the IRR. Decision: Present Value at 12% is $250.09, which is too high. Try a higher discount rate. Next Step: Try 15% Example solution Financial Models – other simple concepts