the investment detective
TRANSCRIPT
10%Year CFs PV CFs PV
0 -2,000 -20001 330 300 13.7 12.454552 330 272.7273 13.7 11.322313 330 247.9339 13.7 10.293014 330 225.3944 13.7 9.3572845 330 204.904 13.7 8.5066226 330 186.2764 13.7 7.7332937 330 169.3422 13.7 7.0302668 1,000 466.5074 13.7 6.391151
73.08559 73.08849
The Investment Detective
Cash flowsDiscount rate Year Project 1 Project 2 Project 3 Project 4
10.00% 0 -2,000 -2,000 -2,000 -2,000 13.7 1 330 1,666 - 160 13.7 2 330 334 - 200 13.7 3 330 165 - 350 13.7 4 330 - - 395 13.7 5 330 - - 432 13.7 6 330 - - 440 13.7 7 330 - - 442 13.7 8 1,000 - - 444
9 - - - 446 10 - - - 448 11 - - - 450 12 - - - 451 13 - - - 451 14 - - - 452 15 - - 10,000 -2,000
8 3 15 15
3,318 2,168 10,015 3,576
CF Excess 1,310 165 8,000 1,561
Payback 7 2 15 6
PV(CF) Project 1 Project 2 Project 3 Project 4 -2,000.00 -2,000.00 -2,000.00 -2,000.00
0.9090909 300.00 1,514.55 - 145.45 0.8264463 272.73 276.03 - 165.29 0.7513148 247.93 123.97 - 262.96 0.6830135 225.39 - - 269.79 0.6209213 204.90 - - 268.24 0.5644739 186.28 - - 248.37 0.5131581 169.34 - - 226.82 0.4665074 466.51 - - 207.13 5.3349262 - - - 189.15
13.70 - - - 172.72 - - - 157.72 - - - 143.70 - - - 130.64 - - - 119.03 - - 2,393.92 -478.78 2,073.09 1,914.55 2,393.92 2,228.22
NPV 73.09 -85.45 393.92 228.22
IRR 10.87% 6.31% 11.33% 12.33%
Profitability 3.65% -4.27% 19.70% 9.21%Index
S CF Ben.
S PV(CF)
Equiv. Annuity 13.70 -34.36 51.79 30.01
Equiv. Annuity to Inf. 136.99 -343.63 517.90 300.05
PV Index 1.037 0.957 1.197 1.092
Cash flowsProject 5 Project 6 Project 7 Project 8 Possible description -2,000 -2,000 -2,000 -2,000 Project 1 Leasing or Partially Amortizing Bond 280 2,200 1,200 -350 Project 2 Advertising campaign 280 - 900 -60 Project 3 Private Equity or Zero-Coupon Bond 280 - 300 60 Project 4 Nuclear-power plant 280 - 90 350 Project 5 Leasing with 0 terminal value or Home mortgage 280 - 70 700 Project 6 One-year bond 280 - - 1,200 Project 7 Mine 280 - - 2,400 Project 8 Orchard 280 - - - 280 - - - 280 - - - 280 - - - 280 - - - 280 - - - 280 - - - 280 - - - 15 1 5 7
4,215 2,201 2,565 4,307
2,200 200 560 2,300
8 1 2 7
Project 5 Project 6 Project 7 Project 8 Rates Project 1 Project 2 Project 3 -2,000.00 -2,000.00 -2,000.00 -2,000.00 0% 1310 165 8000 254.55 2,000.00 1,090.91 -318.18 2% 989.2474 109.8469 5430.147 231.40 - 743.80 -49.59 4% 711.3682 57.40925 3552.645 210.37 - 225.39 45.08 6% 469.5982 7.494106 2172.651 191.24 - 61.47 239.05 8% 258.371 -40.07392 1152.417 173.86 - 43.46 434.64 10% 73.08559 -85.45455 393.9205 158.05 - - 677.37 12% -90.07711 -128.7935 -173.0374 143.68 - - 1,231.58 14% -234.3003 -170.224 -599.0352 130.62 - - - 16% -362.2479 -209.8682 -920.7299 118.75 - - - 18% -476.1577 -247.8379 -1164.84 107.95 - - - 20% -577.9167 -284.2361 -1350.945 98.14 - - - 22% -669.1217 -319.1576 -1493.473 89.22 - - - 24% -751.1292 -352.6896 -1603.106 81.11 - - - 26% -825.0949 -384.9128 -1687.794 73.73 - - - 28% -892.007 -415.9019 -1753.481 67.03 - - - 30% -952.7135 -445.726 -1804.634 2,129.70 2,000.00 2,165.04 2,259.96 129.70 - 165.04 259.96
11.12% 10.00% 15.26% 11.96%
6.49% 0.00% 8.25% 10.98%
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V
17.05 - 43.54 53.40
170.52 - 435.37 533.97
1.065 1.000 1.083 1.1098
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V
Leasing or Partially Amortizing Bond
Private Equity or Zero-Coupon Bond
Leasing with 0 terminal value or Home mortgage
Project 4 Project 5 Project 6 Project 7 Project 81561 2200 200 560 2300
1252.954 1597.794 156.8627 470.7664 1768962.0346 1113.148 115.3846 387.1129 1308.039693.3824 719.4297 75.4717 308.5546 909.1919448.8168 396.654 37.03704 234.6592 562.3647
228.222 129.7023 0 165.0409 259.958130.41123 -92.95794 -35.71429 99.35364 -4.399229
-146.3406 -280.193 -70.17544 37.28684 -236.0677-303.9748 -438.8723 -103.4483 -21.43922 -439.5719-444.4579 -574.3583 -135.5932 -77.07695 -618.7429-569.6755 -690.8677 -166.6667 -129.8547 -776.8347-681.3754 -791.7398 -196.7213 -179.9793 -916.6191-781.1447 -879.6377 -225.8065 -227.6389 -1040.464-870.4035 -956.6992 -253.9683 -273.0045 -1150.398-950.4107 -1024.652 -281.25 -316.2322 -1248.162-1022.275 -1084.901 -307.6923 -357.4643 -1335.258
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V
The Investment Detective
Year 0 1 2 3CFs NPV -2000 160 200 350
-30% -205,140.73 -2,000.00 228.57 408.16 1,020.41 -28% -121,450.91 -2,000.00 222.22 385.80 937.71 -26% -70,987.29 -2,000.00 216.22 365.23 863.72 -24% -40,511.02 -2,000.00 210.53 346.26 797.31 -22% -22,144.41 -2,000.00 205.13 328.73 737.54 -20% -11,154.26 -2,000.00 200.00 312.50 683.59 -18% -4,672.37 -2,000.00 195.12 297.44 634.78 -16% -948.13 -2,000.00 190.48 283.45 590.51 -14% 1,093.25 -2,000.00 186.05 270.42 550.27 -12% 2,114.44 -2,000.00 181.82 258.26 513.59 -10% 2,525.04 -2,000.00 177.78 246.91 480.11
-8% 2,578.28 -2,000.00 173.91 236.29 449.47 -6% 2,430.28 -2,000.00 170.21 226.35 421.39 -4% 2,176.72 -2,000.00 166.67 217.01 395.60 -2% 1,875.50 -2,000.00 163.27 208.25 371.87 0% 1,561.00 -2,000.00 160.00 200.00 350.00 2% 1,252.95 -2,000.00 156.86 192.23 329.81 4% 962.03 -2,000.00 153.85 184.91 311.15 6% 693.38 -2,000.00 150.94 178.00 293.87 8% 448.82 -2,000.00 148.15 171.47 277.84
10% 228.22 -2,000.00 145.45 165.29 262.96 12% 30.41 -2,000.00 142.86 159.44 249.12 14% -146.34 -2,000.00 140.35 153.89 236.24 16% -303.97 -2,000.00 137.93 148.63 224.23 18% -444.46 -2,000.00 135.59 143.64 213.02 20% -569.68 -2,000.00 133.33 138.89 202.55 22% -681.38 -2,000.00 131.15 134.37 192.75 24% -781.14 -2,000.00 129.03 130.07 183.57 26% -870.40 -2,000.00 126.98 125.98 174.97 28% -950.41 -2,000.00 125.00 122.07 166.89 30% -1,022.27 -2,000.00 123.08 118.34 159.31
-20%
-18%
-16%
-14%
-12%
-10% -8%
-6%
-4%
-2% 0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
-12,000.00
-10,000.00
-8,000.00
-6,000.00
-4,000.00
-2,000.00
-
2,000.00
4,000.00
Multiple IRR: Project 4
Discount rate
NP
V
-20%
-18%
-16%
-14%
-12%
-10% -8%
-6%
-4%
-2% 0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
-12,000.00
-10,000.00
-8,000.00
-6,000.00
-4,000.00
-2,000.00
-
2,000.00
4,000.00
Multiple IRR: Project 4
Discount rate
NP
V
4 5 6 7 8 9 10 11 12395 432 440 442 444 446 448 450 451
1,645.15 2,570.36 3,739.94 5,367.05 7,701.91 11,052.30 15,859.80 22,758.00 32,583.67 1,469.83 2,232.65 3,158.33 4,406.51 6,147.85 8,577.14 11,966.11 16,693.79 23,237.35 1,317.26 1,946.82 2,679.55 3,637.48 4,937.75 6,702.69 9,098.31 12,349.90 16,726.15 1,183.98 1,703.79 2,283.34 3,018.05 3,989.09 5,272.45 6,968.54 9,210.07 12,145.45 1,067.13 1,496.27 1,953.82 2,516.29 3,240.61 4,173.34 5,374.42 6,921.05 8,892.86 964.36 1,318.36 1,678.47 2,107.62 2,646.45 3,322.96 4,172.33 5,238.69 6,562.91 873.66 1,165.24 1,447.34 1,773.07 2,172.06 2,660.79 3,259.41 3,992.64 4,879.89 793.38 1,032.97 1,252.50 1,497.85 1,791.22 2,142.01 2,561.45 3,062.95 3,654.48 722.11 918.31 1,087.58 1,270.38 1,483.87 1,733.20 2,024.39 2,364.45 2,755.47 658.67 818.60 947.45 1,081.54 1,234.59 1,409.26 1,608.61 1,836.13 2,091.15 602.04 731.60 827.94 924.11 1,031.44 1,151.20 1,284.85 1,433.99 1,596.86 551.37 655.46 725.65 792.33 865.13 944.59 1,031.33 1,126.02 1,226.66 505.92 588.63 637.80 681.60 728.38 778.37 831.76 888.80 947.64 465.06 529.82 562.12 588.20 615.48 644.01 673.85 705.06 736.07 428.25 477.92 496.70 509.14 521.88 534.93 548.30 561.99 574.73 395.00 432.00 440.00 442.00 444.00 446.00 448.00 450.00 451.00 364.92 391.28 390.71 384.79 378.95 373.19 367.52 361.92 355.61 337.65 355.07 347.74 335.88 324.43 313.35 302.65 292.31 281.69 312.88 322.82 310.18 293.96 278.57 263.99 250.16 237.05 224.13 290.34 294.01 277.27 257.90 239.88 223.11 207.51 193.00 179.10 269.79 268.24 248.37 226.82 207.13 189.15 172.72 157.72 143.70 251.03 245.13 222.92 199.94 179.32 160.83 144.24 129.36 115.76 233.87 224.37 200.46 176.64 155.65 137.15 120.85 106.48 93.61 218.15 205.68 180.59 156.39 135.43 117.28 101.55 87.94 75.98 203.74 188.83 162.99 138.75 118.12 100.55 85.60 72.86 61.89 190.49 173.61 147.36 123.35 103.26 86.44 72.35 60.56 50.58 178.30 159.84 133.44 109.88 90.47 74.49 61.33 50.50 41.48 167.07 147.36 121.04 98.06 79.43 64.35 52.13 42.23 34.13 156.72 136.03 109.96 87.67 69.89 55.72 44.42 35.41 28.17 147.15 125.73 100.04 78.51 61.62 48.36 37.95 29.78 23.32 138.30 116.35 91.16 70.44 54.43 42.06 32.50 25.11 19.36
-20%
-18%
-16%
-14%
-12%
-10% -8%
-6%
-4%
-2% 0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
-12,000.00
-10,000.00
-8,000.00
-6,000.00
-4,000.00
-2,000.00
-
2,000.00
4,000.00
Multiple IRR: Project 4
Discount rate
NP
V
-20%
-18%
-16%
-14%
-12%
-10% -8%
-6%
-4%
-2% 0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
-12,000.00
-10,000.00
-8,000.00
-6,000.00
-4,000.00
-2,000.00
-
2,000.00
4,000.00
Multiple IRR: Project 4
Discount rate
NP
V
13 14 15451 452 -2000
46,548.11 66,644.74 -421,268.90 32,274.10 44,924.52 -276,084.83 22,602.90 30,612.19 -183,043.45 15,980.85 21,074.06 -122,694.79 11,401.10 14,649.20 -83,101.90 8,203.64 10,277.29 -56,843.42 5,951.09 7,273.52 -39,248.42 4,350.57 5,190.73 -27,342.66 3,204.03 3,733.88 -19,211.14 2,376.30 2,706.33 -13,607.86 1,774.29 1,975.80 -9,713.87 1,333.32 1,452.48 -6,985.74 1,008.13 1,074.85 -5,059.55 766.74 800.46 -3,689.45 586.46 599.75 -2,707.94 451.00 452.00 -2,000.00 348.64 342.56 -1,486.03 270.86 261.02 -1,110.53 211.45 199.92 -834.53 165.83 153.89 -630.48 130.64 119.03 -478.78 103.36 92.49 -365.39 82.11 72.19 -280.19 65.50 56.59 -215.85 52.45 44.54 -167.03 42.15 35.20 -129.81 34.00 27.93 -101.31 27.52 22.25 -79.38 22.35 17.78 -62.44 18.22 14.26 -49.30 14.89 11.48 -39.07
The Investment Detective
Cash flowsDiscount rate Year Project 1 Project 2 Project 3 Project 4
10.00% 0 -2,000 -2,000 -2,000 -2,000 13.7 1 330 1,666 - 160 13.7 2 330 334 - 200 13.7 3 330 165 - 350 13.7 4 330 - - 395 13.7 5 330 - - 432 13.7 6 330 - - 440 13.7 7 330 - - 442 13.7 8 1,000 - - 444
9 - - - 446 10 - - - 448 11 - - - 450 12 - - - 451 13 - - - 451 14 - - - 452 15 - - 10,000 -2,000
8 3 15 15
3,310 2,165 10,000 3,561
CF Excess 1,310 165 8,000 1,561
Payback 7 2 15 6
PV(CF) Project 1 Project 2 Project 3 Project 4 -2,000.00 -2,000.00 -2,000.00 -2,000.00
0.9090909 300.00 1,514.55 - 145.45 0.8264463 272.73 276.03 - 165.29 0.7513148 247.93 123.97 - 262.96 0.6830135 225.39 - - 269.79 0.6209213 204.90 - - 268.24 0.5644739 186.28 - - 248.37 0.5131581 169.34 - - 226.82 0.4665074 466.51 - - 207.13 5.3349262 - - - 189.15
13.70 - - - 172.72 - - - 157.72 - - - 143.70 - - - 130.64 - - - 119.03 - - 2,393.92 -478.78 2,073.09 1,914.55 2,393.92 2,228.22
NPV 73.09 -85.45 393.92 228.22
IRR 10.87% 6.31% 11.33% 12.33%
Profitability 3.65% -4.27% 19.70% 9.21%Index
S CF Ben.
S PV(CF)
Equiv. Annuity 13.70 -34.36 51.79 30.01
Equiv. Annuity to Inf. 136.99 -343.63 517.90 300.05
PV Index 1.037 0.957 1.197 1.092
Cash flowsProject 5 Project 6 Project 7 Project 8 Possible description -2,000 -2,000 -2,000 -2,000 Project 1 Leasing or Partially Amortizing Bond 280 2,200 1,200 -350 Project 2 Advertising campaign 280 - 900 -60 Project 3 Private Equity or Zero-Coupon Bond 280 - 300 60 Project 4 Nuclear-power plant 280 - 90 350 Project 5 Leasing with 0 terminal value or Home mortgage 280 - 70 700 Project 6 One-year bond 280 - - 1,200 Project 7 Mine 280 - - 2,250 Project 8 Orchard 280 - - - 280 - - - 11% 280 - - - 280 - - - 280 - - - 280 - - - 280 - - - 280 - - - 15 1 5 7
4,200 2,200 2,560 4,150
2,200 200 560 2,150
8 1 2 7
Project 5 Project 6 Project 7 Project 8 Rates Project 1 Project 2 Project 3 -2,000.00 -2,000.00 -2,000.00 -2,000.00 0% 1310 165 8000 254.55 2,000.00 1,090.91 -318.18 2% 989.2474 109.8469 5430.147 231.40 - 743.80 -49.59 4% 711.3682 57.40925 3552.645 210.37 - 225.39 45.08 6% 469.5982 7.494106 2172.651 191.24 - 61.47 239.05 8% 258.371 -40.07392 1152.417 173.86 - 43.46 434.64 10% 73.08559 -85.45455 393.9205 158.05 - - 677.37 12% -90.07711 -128.7935 -173.0374 143.68 - - 1,154.61 14% -234.3003 -170.224 -599.0352 130.62 - - - 16% -362.2479 -209.8682 -920.7299 118.75 - - - 18% -476.1577 -247.8379 -1164.84 107.95 - - - 20% -577.9167 -284.2361 -1350.945 98.14 - - - 22% -669.1217 -319.1576 -1493.473 89.22 - - - 24% -751.1292 -352.6896 -1603.106 81.11 - - - 26% -825.0949 -384.9128 -1687.794 73.73 - - - 28% -892.007 -415.9019 -1753.481 67.03 - - - 30% -952.7135 -445.726 -1804.634 2,129.70 2,000.00 2,165.04 2,182.98 129.70 - 165.04 182.98
11.12% 10.00% 15.26% 11.41%
6.49% 0.00% 8.25% 7.73%
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V
17.05 - 43.54 37.59
170.52 - 435.37 375.86
1.065 1.000 1.083 1.0773
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V
Leasing or Partially Amortizing Bond
Private Equity or Zero-Coupon Bond
Leasing with 0 terminal value or Home mortgage
Project 4 Project 5 Project 6 Project 7 Project 81561 2200 200 560 2300
1252.954 1597.794 156.8627 470.7664 1768962.0346 1113.148 115.3846 387.1129 1308.039693.3824 719.4297 75.4717 308.5546 909.1919448.8168 396.654 37.03704 234.6592 562.3647
228.222 129.7023 0 165.0409 259.958130.41123 -92.95794 -35.71429 99.35364 -4.399229
-146.3406 -280.193 -70.17544 37.28684 -236.0677-303.9748 -438.8723 -103.4483 -21.43922 -439.5719-444.4579 -574.3583 -135.5932 -77.07695 -618.7429-569.6755 -690.8677 -166.6667 -129.8547 -776.8347-681.3754 -791.7398 -196.7213 -179.9793 -916.6191-781.1447 -879.6377 -225.8065 -227.6389 -1040.464-870.4035 -956.6992 -253.9683 -273.0045 -1150.398-950.4107 -1024.652 -281.25 -316.2322 -1248.162-1022.275 -1084.901 -307.6923 -357.4643 -1335.258
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
-2000
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Mutually Exclusive Projects 7 & 8
Project 7
Project 8
Discount rate
NP
V