Comments on: Reader question: calculating a basic NPV problem

By: Conrad

Conrad — Sat, 06 Feb 2010 15:52:28 +0000

I have used your sample formula for successfully calculating the NPV on a cash flow scenario over a five year horizon. whilst the net annual cash flows differ each year, how do I calculate the NPV in perpetuity assuming I accept a position in perpetuity of the same net income stream as year 5. Is there an excel formula that I can adopt / use for calculating this.

Many thanks / p.s your user notes are an excellent guide.

Conrad.

By: chef Geno Bahena

chef Geno Bahena — Fri, 22 Jan 2010 18:11:51 +0000

Please help me with this problem
I want to know how to calculate my percentage of food cost

1Lb of Shrimp u 12 cost me $10.00
Im serving 8 oz. portions 6 shrimp %5.00
sauce .50 cents 4oz.
accompaniment .50 cents 4oz.
adds a dollar more to my portions now the portion cost $6.00 Dollars

Cost $6.00
Labor $6.00
Profit $6.00
X 3 this is the price I shoot have in the menu. I’m I correct?

Food Cost%. ? what’s my food cost%

my cost, cost pluss labor $12.00
my Profit, Profit $6.00

if you may have any question in helping me with this do not hesitate to call: 505 5772130 im going crazy
thaks a lot Geno Bahena

By: olu

olu — Wed, 25 Nov 2009 12:05:51 +0000

pls, i have an asignment here on NPV. but the figures given are profil for each year not cash flow. i was also given a scrap value of “`£40,000 at the end of the 4 years. with 20% cost of capital.. how do i calculate NPV.

thanks

By: Mike

Mike — Tue, 29 Sep 2009 16:02:25 +0000

How do you use excel to compute imputed interest?
Problem:
6,000,000 loan
8% @ yr. compounded semiannually
Payment 300,000 at the end of each year

By: Eva Hoekzema

Eva Hoekzema — Wed, 16 Sep 2009 01:14:16 +0000

I came upon your website today. In fact it helped to understand a NPV problem I needed to work. I need help with another problem. How can I secure your help/feedback.

By: Jaime Adriance

Jaime Adriance — Sat, 29 Aug 2009 23:26:59 +0000

How do you calculat the NPV on a $10,00 loan at 15% interest when the conditions are the interest is to be repaid annually for 5 years and the non-amortized principal is due at the end of the fifth year. The tax rate is 34%

By: Isaac mangwazu

Isaac mangwazu — Fri, 06 Mar 2009 17:56:31 +0000

What do u do with the scrap value givn in NPV. for example, a company plan’s to buy equipment @ a cost of 100,000 & the net cash flows from year 1 to 5 are 25000 & scrap value is 10000. Analyse whether the equipment is worth purchasing. Plz send answer @ http://www.Zexbwoy@gmail.Com

By: Sylvia

Sylvia — Sun, 30 Nov 2008 23:22:06 +0000

Here is a problem I need to figure out:
$1 million in net working capital to start
Additional NWC each year equal to 35% of projected sales increase for following year, no NWC for 5th yr
Total fixed costs of $175,000 per year
Variable costs of $227 per unit, units priced at $360 each
Needed equipment to begin $13.2 million
Equipment considered industrial machinery falls into class 8 (20%) for tax purposes
$6 million of equipment eligible for a 5% ITC
In 5 yrs equipment sold for scrap value of $1million
Government offering non –taxable grant of $500,000 payable a year after start of project
Company is in 40% tax bracket
ROR is 25%
Year Unit sales
1 90,000
2 100,000
3 110,000
4 117,000
5 65,000
How do I calculate NPV and IRR and is it a worthwhile project?

By: Vernon Steen

Vernon Steen — Sat, 26 Jul 2008 12:27:59 +0000

Thanks for breaking down NPV, DCF, IRR into simple terms. It’s still difficult for me (a non-finance guy) to grasp, but you make it easier.

By: rqueen2200

rqueen2200 — Thu, 20 Sep 2007 16:16:11 +0000

I expexct to save 500,000 per year for 10years. My cost capital is 14%.
I believe it can purchase a new supplier for 2 million. How do I calucale NPV,IRR, and payback

By: frank

frank — Tue, 05 Jun 2007 18:31:41 +0000

Welcome back! You’ve been missed in the blogosphere.