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Scenario Summary: Changing Cells

This document contains information about two investment options, including changing variables, cash flows over 5 years, internal rates of return (IRR), net present values (NPV) at different discount rates, and conclusions. Option A has a 13% discount rate and $1600 initial cash flow, while Option B has 15% and $1850. Option B has a higher IRR of 16% compared to Option A's 14%, but Option A has a higher NPV, indicating it is preferable according to the NPV decision rule. Graphs show NPVs at different discount rates for each option.

Uploaded by

Vamshi Krishna Mallela
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
28 views

Scenario Summary: Changing Cells

This document contains information about two investment options, including changing variables, cash flows over 5 years, internal rates of return (IRR), net present values (NPV) at different discount rates, and conclusions. Option A has a 13% discount rate and $1600 initial cash flow, while Option B has 15% and $1850. Option B has a higher IRR of 16% compared to Option A's 14%, but Option A has a higher NPV, indicating it is preferable according to the NPV decision rule. Graphs show NPVs at different discount rates for each option.

Uploaded by

Vamshi Krishna Mallela
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Scenario Summary

Current Values:

increase

Changing Cells:
$E$4
13%
15%
$F$4
15%
17%
$E$5
1600
1600
$F$5
1850
1850
Result Cells:
$J$17
57.50978532 -22.76631311
$K$17
47.42272902 -31.14100001
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

Scenario Summary
normal

increase

decrease

Changing Cells:
$E$4
13%
15%
11%
$F$4
15%
17%
13%
$E$5
1600
1600
1600
$F$5
1850
1850
1850
Result Cells:
$J$17
57.50978532 -22.76631311 144.3088594
$K$17
47.42272902 -31.14100001 131.8813724
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.

changing variables

option A option B
13%
15%
1600
1850

discount rate
initial cash flow

year
0
1
2
3
4
5
IRR
RANKING

option A option B
cash flow cash flow
-1600
-1850
350
675
475
575
625
725
575
350
350
400
14%
2

16%
1

objective

Based on IRR rule, Option B is preferable having larger IRR.(IRR is not concerne
Based on NPV rule, option A is preferable having larger NPV.

57.50979
-1400
-1500
-1600
-1700
-1800

11%
12%
13%
344.3089 300.052 257.5098
244.3089 200.052 157.5098
144.3089 100.052 57.50979
44.30886 0.052041 -42.4902
-55.6911
-99.948
-142.49

47.42273
-1650
-1750
-1850
-1950
-2050

13%
331.8814
231.8814
131.8814
31.88137
-68.1186

14%
15%
288.879 247.4227
188.879 147.4227
88.879 47.42273
-11.121 -52.5773
-111.121 -152.577

cash flows

1000

0-1000

0
-1000

-1000-0
2

-2000
-3000

NPV

-2000--1000
5

-3000--2000

year
0
1
2
3
4
5
NPV
RANKING

option A
option B
present value present value
-1600
-1850
$309.73 $586.96
$371.99 $434.78
$433.16 $476.70
$352.66 $200.11
$189.97 $198.87

57.50979
11% 144.3089
12% 100.052
13% 57.50979
14% 16.59701
15% -22.7663

57.50978532 47.42273
1
2

13%
14%
15%
16%
17%

160
140
120
100
N
P
V

80
60
40
20

ng larger IRR.(IRR is not concerned about the cost of capital while ranking projects)
ing larger NPV.

0
11%

-20
-40

14%
15%
216.597 177.2336869
116.597 77.23368689
16.59701 -22.76631311
-83.403 -122.7663131
-183.403 -222.7663131

160
140
120
100

16%
17%
207.4391
168.859
107.4391 68.85899999
7.439124 -31.14100001
-92.5609
-131.141
-192.561
-231.141

N
P
V

80
60
40
20
0
-20
-40

1000

13%

0
0-1000
-1000-0
-2000--1000

-1000
1

-3000--2000

NPV

-2000

cash flows

1000

47.42273
131.8814
88.879
47.42273
7.439124
-31.141

57.50978532

57.50978532

12%

13%

14%

15%

discount rates

47.42272902

47.42272902

13%

14%

15%
discount rate

16%

17%

cash flows

0-1000
-1000-0
-2000--1000

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