Some help on Week 3 Discussion 2 Durango Calculate payback methods, discounted payback methods, net present values, internal rate of return, and profitability index. Determine what Durango should do based on calculations. YR Poofy Puffs 0 -24890000 1 12950000 2 ? 3 ? 4 ? Poffy puffs payback method initial outlay 24890000 (2950000 yr 1 + 10923000 yr 2) = 23873000 still need 1017000 from year 3 to payback initial outlay 1017000/8231000 =? payback period = ? Poofy puffs discounted payback method PV = 1/(1+i)n PV yr 0 = -24890000 yr 1 = 11772727.27 yr 2 = 9027272.73 yr 3 = ? yr 4 =? discounted payback period ?yrs NPV = 31930455.57 (PV of yr 1, 2, 3, 4) 24890000 NPV = ? Profitability index = 31930455.57/24890000 Profitability index = ? YR Filling Fiber 0 -13500000 1 7230000 2 8100000 3 ? 4 ? Filling Fiber payback method initial outlay 13500000 7230000 yr 1; need 6270000 from yr 2 to payback initial outlay 6270000/8100000 =? payback period = ? Filling Fiber discounted payback method PV = 1/(1+i)n PV yr 0 = -13500000 yr 1 = 6572727.27 yr 2 = 6694214.88 yr 3 =? yr 4 =? discounted payback period = ? yrs NPV = 23328276.76 13500000 NPV = 9828276.76 Profitability index = 9828276.76/13500000 Profitability index =?
