The internal rate of return of this project can be calculated by the following formula:
(r-16%)/(18%-16%) = (0-90)/(-10-90), then r= 17.8%.
1. The discount amount is calculated as follows:
Par amount (1- discount rate × discount date) = discount amount.
Maturity value of interest-free bills (discounted value at maturity) = face value of bills receivable.
Maturity value of interest-bearing bills (discounted in advance) = face value of bills receivable-discounted interest.
Face value of bills receivable × (maturity days of bills /360)× discount rate = discount interest.
Net present value: Net present value refers to the difference between the present value of future capital (cash) inflow (income) and the present value of future capital (cash) outflow (expenditure), which is the basic index of the net present value method in project evaluation. Convert future capital inflow and capital outflow into present value according to the present value coefficient of each period of the expected discount rate, and then determine their present value. This expected discount rate is determined according to the minimum investment return rate of the enterprise, which is the minimum acceptable limit of enterprise investment.
Second, the folding calculation method
1. Calculate the annual operating net cash flow.
2. Calculate the total present value of future remuneration.
(1) Convert the annual net operating cash flow into present value. If the NCF is equal every year, it will be converted into present value according to the annuity method; If the annual NCFs are not equal, first discount the annual NCFs and then add them up.
(2) Convert the ending cash flow into present value.
(3) Calculate the total present value of future remuneration.
3. Calculate the net present value.
Net present value = total present value of future remuneration-present value of initial investment
Third, the folding rules are adopted.
In the decision of adopting and rejecting only one scheme, the scheme with positive net present value will be adopted, and the scheme with negative net present value will not be adopted. In multi-scheme mutually exclusive decision-making, the scheme with the largest net present value should be chosen.
PS: Present value is the present value of funds (generally expressed by the letter P, which is divided into simple interest present value and compound interest present value).
Four, the net present value rule conditions:
Regardless of risk definition and measurement; Or treat cash flow as a consistent quantity; Or set the expected cash flow and expected rate of return.
net present value
NCFt-net cash flow in year t
C- initial investment flow /flo/vt. Flow, circulation, flow.
K- discount rate (that is, the discount rate predetermined by the enterprise)
1NPV= total present value of future remuneration-initial investment.
NPV=NCF*PVIFAk, T-C (Scheme A 4400 conforms to the principle of triple annual net present value).
2NPV= total present value of future remuneration-initial investment.
NPV= multi-series NCFt*PVIFk, T-C.
Net present value (NPV)= present value of future net cash flow-present value of original investment.
When calculating the net present value, the future cash flow of an investment project should be discounted at a predetermined discount rate, which is the lowest return on investment expected by investors. The net present value is positive and the scheme is feasible, indicating that the actual rate of return of the scheme is higher than the required rate of return; The net present value is negative, and the scheme is not desirable, indicating that the actual return on investment of the scheme is lower than the required return.
When the net present value is zero, it shows that the investment return of the scheme just reaches the required investment return. Therefore, the economic essence of net present value is the residual income after the investment scheme income exceeds the basic income.