Calculate payback methods, discounted payback methods, net present values, internal rate of return, and profitability index. Determine what Durango should do based on calculations.

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 =?