RATE PA 1.00% 2.00% 3.

00%
RATE PM 0.0833% 0.1667% 0.2500%

INVESTMENT 0 -10,000,000 635,243 473,917 315,940

PAYBACK 1 300,000 299,750
2 300,000 299,501
3 300,000 299,251
4 300,000 299,002
5 300,000 298,753
6 300,000 298,504
7 300,000 298,256
8 300,000 298,007
9 300,000 297,759
10 300,000 297,511
11 300,000 297,264
12 300,000 297,016
13 300,000 296,769
14 300,000 296,522
15 300,000 296,275
16 300,000 296,028
17 300,000 295,782
18 300,000 295,535
19 300,000 295,289
20 300,000 295,043
21 300,000 294,798
22 300,000 294,552
23 300,000 294,307
24 300,000 294,062
25 300,000 293,817
26 300,000 293,573
27 300,000 293,328
28 300,000 293,084
29 300,000 292,840
30 300,000 292,596
31 300,000 292,352
32 300,000 292,109
33 300,000 291,866
34 300,000 291,623
35 300,000 291,380
36 300,000 291,137
10,635,243
 4.00% 5.065% 6.00% 7.00% 8.00% 9.00% 10.00%
0.3333% 0.4221% 0.5000% 0.5833% 0.6667% 0.7500% 0.8333%

161,230 0 -138,695

0.422%
5.065%

0.42%
5.065%
 11.00% 12.00%
0.9167% 1.0000%
Rate PA 1% 2%
Surplus over Investment 800,000 800,000
Truly left with (After deducting the time value of money) 635,243 473,917
164,757 326,083

5.065% is a good IRR value depends on the cost of capital

Rate of borrowing > IRR No money left

Rate of borrowing< IRR Money left to take home
 3% 4% 5% 6%
800,000 800,000 800,000 800,000
315,940 161,230 9,710 -138,695
484,060 638,770 790,290 938,695
RATE PA 1.00% 2.00% 3.00%
RATE PM 0.0833% 0.1667% 0.2500%

INVESTMENT 0 -8,302,318 2,332,926 2,171,600 2,013,622

PAYBACK 1 300,000 299,750
2 300,000 299,501
3 300,000 299,251
4 300,000 299,002
5 300,000 298,753
6 300,000 298,504
7 300,000 298,256
8 300,000 298,007
9 300,000 297,759
10 300,000 297,511
11 300,000 297,264
12 300,000 297,016
13 300,000 296,769
14 300,000 296,522
15 300,000 296,275
16 300,000 296,028
17 300,000 295,782
18 300,000 295,535
19 300,000 295,289
20 300,000 295,043
21 300,000 294,798
22 300,000 294,552
23 300,000 294,307
24 300,000 294,062
25 300,000 293,817
26 300,000 293,573
27 300,000 293,328
28 300,000 293,084
29 300,000 292,840
30 300,000 292,596
31 300,000 292,352
32 300,000 292,109
33 300,000 291,866
34 300,000 291,623
35 300,000 291,380
36 300,000 291,137
10,635,243
 4.00% 5.065% 6.00% 7.00% 8.00% 9.00% 10.00%
0.3333% 0.4221% 0.5000% 0.5833% 0.6667% 0.7500% 0.8333%

1,858,912 1,697,682 1,558,987

0.422% 1.497% (GOALSEEK TO VALUE 18% AND CHANGING INVESTMENT)

5.065% 17.964%

5%
1.5%
0.1796429841
 11.00% 12.00%
0.9167% 1.0000%
LOAN AMOUNT RATE PA 6% 7.00% 8.00% 9.00%
100,000.00 RATE PM 0.50% 0.58% 0.67% 0.75%

TENURE YR TENURE MONTH

1 12 Rs. -8,564 Rs. -8,602 Rs. -8,641 Rs. -8,680
2 24 Rs. -4,410 Rs. -4,451 Rs. -4,493 Rs. -4,534
3 36 Rs. -3,027 Rs. -3,070 Rs. -3,113 Rs. -3,156
4 48 Rs. -2,337 Rs. -2,381 Rs. -2,425 Rs. -2,470
5 60 Rs. -1,924 Rs. -1,969 Rs. -2,014 Rs. -2,060

CONSIDERING 8564 AND 12 PAYMENTS i.e. 1 YEAR

Prinicipal PM Interest PM
PPMT IPMT
1 8564 -8,564 0.00
2 8564 -8,107 -457.18
3 8564 -8,147 -416.65
4 8564 -8,188 -375.91
5 8564 -8,229 -334.97
6 8564 -8,270 -293.83
7 8564 -8,311 -252.48
8 8564 -8,353 -210.92
9 8564 -8,395 -169.16
10 8564 -8,437 -127.18
11 8564 -8,479 -85.00
12 8564 -8,521 -42.61

Q:RECURRING DEPOSIT OF 10000 AT 120 MONTHS AND MONTHLY COMPOUNDING INTEREST OF 1% PER MONTH
12% 1%
10000
120 Rs. -2,323,391
 10.00% 11.00% 12.00% 13.00% 14.00%
0.83% 0.92% 1.00% 1.08% 1.17%

Rs. -8,719 Rs. -8,758 Rs. -8,797 Rs. -8,836 Rs. -8,875
Rs. -4,576 Rs. -4,618 Rs. -4,661 Rs. -4,703 Rs. -4,746
Rs. -3,200 Rs. -3,244 Rs. -3,289 Rs. -3,333 Rs. -3,378
Rs. -2,515 Rs. -2,561 Rs. -2,607 Rs. -2,654 Rs. -2,701
Rs. -2,107 Rs. -2,154 Rs. -2,202 Rs. -2,251 Rs. -2,300

% PER MONTH
 1-Jan-16 -200000 12.102% XIRR
28-Feb-16 32000
14-Mar-16 60000 XNPV
24-Oct-16 120640
IRR gives IRR per period
XNPV annualized payments
XIRR annualized payments
Newsvendor problem
stocking decision for perishable products
TIMES OF INDIA

SP 4 AVG DAILY DEMAND 20

CP 3 STDDEV DAILY DEMAND 1
GP 1

DECISION VAR -3 -2
STOCK 17 18
-3 17 17 17
-2 18 14 18
-1 19 11 15
0 20 8 12
1 21 5 9
2 22 2 6
3 23 -1 3
 RANDOM VAR
DEMAND
-1 0 1 2 3
19 20 21 22 23
17 17 17 17 17
18 18 18 18 18
19 19 19 19 19
16 20 20 20 20
13 17 21 21 21
10 14 18 22 22
7 11 15 19 23
Newsvendor problem
stocking decision for perishable products
TIMES OF INDIA

SP 4 AVG DAILY DEMAND 20

CP 3 STDDEV DAILY DEMAND 1
GP 1

0.44% 5.40%
4.50% 10%
DECISION VAR -3 -2
STOCK 17 18
-3 17 17 17
-2 18 14 18
-1 19 11 15
0 20 8 12
1 21 5 9
2 22 2 6
3 23 -1 3

NO

YES
 RANDOM VAR
DEMAND
24.20% 39.89% 24.20% 5.40% 0.44%
20% 30% 20% 10% 4.50%
-1 0 1 2 3
19 20 21 22 23 EMV
17 17 17 17 17 16.995
18 18 18 18 18 17.977
19 19 19 19 19 18.743
16 20 20 20 20 18.542
13 17 21 21 21 16.744
10 14 18 22 22 13.978
7 11 15 19 23 10.997

18.74344

PAISE CHANCE
17TH NEWSPAPER 99 99% 1 PROFIT
-3 1% -3 LOSS
(IN PAISE) 96

20TH NEWSPAPER 65 65% 1 PROFIT

-105 35% -3 LOSS
(IN PAISE) -40 ITS NEGATIVE

19TH NEWSPAPER 85 85% 1 PROFIT

-45 15% -3 LOSS
(IN PAISE) 40 ITS POSITIVE

23 NEWSPAPER 1% 1 PROFIT 75 75%

99% -3 -75 25%
0

COST OF UNDERSTOCKING -1
COST OF OVERSTOCKING -3
GROSS PROFIT

OPTIMAL STOCKING POINT

22
19.3255102498

16.995
17.98
18.743
18.542
16.744
13.978
10.997

p* =ku/(ku+ko)
p*= 1/(1+3)
0.25

1
-3
TOTAL REVENUE - TOTAL COST
TOTAL REVENUE -(CP*STOCK)
(SP*UNITS SOLD)-(CP*STOCK)
SP*MINIMUM((STOCK,DEMAND)-(CP*STOCK))

POINT AT WHICH EXPECTED MONETARY VALUE OF EACH STOCKING DECISION IS MAXIMUM

NORMINV
Newsvendor problem
stocking decision for perishable products
TIMES OF INDIA

SP 4 AVG DAILY DEMAND 20

CP 0.01 STDDEV DAILY DEMAND 1
GP 3.99

0.00% 0.00%
4.50% 10%
DECISION VAR -3 -2
STOCK 17 18
-3 17 67.83 67.83
-2 18 67.82 71.82
-1 19 67.81 71.81
0 20 67.8 71.8
1 21 67.79 71.79
2 22 67.78 71.78
3 23 67.77 71.77

NO

YES
 RANDOM VAR
DEMAND
0.00% 0.00% 0.00% 0.00% 0.00%
20% 30% 20% 10% 4.50%
-1 0 1 2 3
19 20 21 22 23
67.83 67.83 67.83 67.83 67.83 67.83
71.82 71.82 71.82 71.82 71.82 71.82
75.81 75.81 75.81 75.81 75.81 75.81
75.8 79.8 79.8 79.8 79.8 79.8
75.79 79.79 83.79 83.79 83.79 83.79
75.78 79.78 83.78 87.78 87.78 87.78
75.77 79.77 83.77 87.77 91.77 91.77

91.77

PAISE CHANCE
17TH NEWSPAPER 99 99% 1 PROFIT
-3 1% -3 LOSS
(IN PAISE) 96

20TH NEWSPAPER 65 65% 1 PROFIT

-105 35% -3 LOSS
(IN PAISE) -40 ITS NEGATIVE

19TH NEWSPAPER 85 85% 1 PROFIT

-45 15% -3 LOSS
(IN PAISE) 40 ITS POSITIVE

23 NEWSPAPER 1% 1 PROFIT 75 75%

99% -3 -75 25%
0

COST OF UNDERSTOCKING -1
COST OF OVERSTOCKING -3
GROSS PROFIT

OPTIMAL STOCKING POINT

19.33

16.995
17.98
18.743
18.542
16.744
13.978
10.997

1
-3
TOTAL REVENUE - TOTAL COST
TOTAL REVENUE -(CP*STOCK)
(SP*UNITS SOLD)-(CP*STOCK)
SP*MINIMUM((STOCK,DEMAND)-(CP*STOCK))

POINT AT WHICH EXPECTED MONETARY VALUE OF EACH STOCKING DECISION IS MAXIMUM

NORMINV

FOR SP 4
CP 0.01
GP 3.99
Loan Amount
10,000,000.00

Tenure 3.00 yrs 36 months

Cashflows300000 every month

Costof debt 12% p.a.

Return on equity 18%
CFO 18% return

Loan Amount Rate PA 1% 2%

10,000,000.00 Rate PM 0.0833% 0.1667%

0 -8,302,317.63 2,332,926 2,171,600

1 300,000.00 299,750.21
2 300,000.00
3 300,000.00
4 300,000.00
5 300,000.00
6 300,000.00
7 300,000.00
8 300,000.00
9 300,000.00
10 300,000.00
11 300,000.00
12 300,000.00
13 300,000.00
14 300,000.00
15 300,000.00
16 300,000.00
17 300,000.00
18 300,000.00
19 300,000.00
20 300,000.00
21 300,000.00
22 300,000.00
23 300,000.00
24 300,000.00
25 300,000.00
26 300,000.00
27 300,000.00
28 300,000.00
29 300,000.00
30 300,000.00
31 300,000.00
32 300,000.00
33 300,000.00
34 300,000.00
35 300,000.00
36 300,000.00
 3% 4% 5.0648% 6%
0.2500% 0.3333% 0.4221% 0.5000%

2,013,622 1,858,912 1,697,682 1,558,987

1.4970%
17.964%
 7% 8% 9%
0.5833% 0.6667% 0.7500%

1,413,622 1,271,224 1,131,724

 10% 11% 12%
0.8333% 0.9167% 1.0000%

995,053 861,145 729,934

RATE PA 1.00% 2.00% 3.00%
RATE PM 0.0833% 0.1667% 0.2500%

INVESTMENT 0 -8,302,318 2,332,925.684044690 2,171,599.637565080 2,013,621.898762030

PAYBACK 1 300,000 299,750
2 300,000 299,501
3 300,000 299,251
4 300,000 299,002
5 300,000 298,753
6 300,000 298,504
7 300,000 298,256
8 300,000 298,007
9 300,000 297,759
10 300,000 297,511
11 300,000 297,264
12 300,000 297,016
13 300,000 296,769
14 300,000 296,522
15 300,000 296,275
16 300,000 296,028
17 300,000 295,782
18 300,000 295,535
19 300,000 295,289
20 300,000 295,043
21 300,000 294,798
22 300,000 294,552
23 300,000 294,307
24 300,000 294,062
25 300,000 293,817
26 300,000 293,573
27 300,000 293,328
28 300,000 293,084
29 300,000 292,840
30 300,000 292,596
31 300,000 292,352
32 300,000 292,109
33 300,000 291,866
34 300,000 291,623
35 300,000 291,380
36 300,000 291,137
 4.00% 5.065% 6.00% 7.00%
0.3333% 0.4221% 0.5000% 0.5833%

1,858,912.295537160 1,697,682.369302710 1,558,987.240853450 1,413,621.704563590

1.497%
17.964%
 8.00% 9.00% 10.00% 11.00% 12.00%
0.6667% 0.7500% 0.8333% 0.9167% 1.0000%

1,271,224.022117110 1,131,723.944458380 995,053.044671171 861,144.667484921 729,933.880255892

Newsvendor problem
stocking decision for perishable products
TIMES OF INDIA

SP 4 AVG DAILY DEMAND 20

CP 3 STDDEV DAILY DEMAND 1
GP 1

0.44% 5.40%
DECISION VAR -3 -2
STOCK 17 18
-3 17 17 17
-2 18 14 18
-1 19 11 15
0 20 8 12
1 21 5 9
2 22 2 6
3 23 -1 3

probability 0.25

NORMINV 19.3255102498
 RANDOM VAR
DEMAND

24.20% 39.89% 24.20% 5.40% 0.44%

-1 0 1 2 3
19 20 21 22 23
17 17 17 17 17 16.995
18 18 18 18 18 17.977
19 19 19 19 19 18.743
16 20 20 20 20 18.542
13 17 21 21 21 16.744
10 14 18 22 22 13.978
7 11 15 19 23 10.997

18.743

understocking profit 1
overstocking cp 3
GROSS PROFIT

OPTIMAL STOCKING POINT

TOTAL REVENUE - TOTAL COST
TOTAL REVENUE -(CP*STOCK)
(SP*UNITS SOLD)-(CP*STOCK)
SP*MINIMUM((STOCK,DEMAND)-(CP*STOCK))

POINT AT WHICH EXPECTED MONETARY VALUE OF EACH STOCKING DECISION IS MAXIMUM

LOAN AMOUNT RATE PA 6% 7.00% 8.00% 9.00%
100,000.00 RATE PM 0.50% 0.58% 0.67% 0.75%

TENURE YR TENURE MONTH

1 12 Rs. -8,564 Rs. -8,602 Rs. -8,641 Rs. -8,680
2 24 Rs. -4,410 Rs. -4,451 Rs. -4,493 Rs. -4,534
3 36 Rs. -3,027 Rs. -3,070 Rs. -3,113 Rs. -3,156
4 48 Rs. -2,337 Rs. -2,381 Rs. -2,425 Rs. -2,470
5 60 Rs. -1,924 Rs. -1,969 Rs. -2,014 Rs. -2,060

CONSIDERING 8564 AND 12 PAYMENTS i.e. 1 YEAR

Prinicipal PM Interest PM
PPMT IPMT
1 8564 -8,564 0.00
2 8564 -8,107 -457.18
3 8564 -8,147 -416.65
4 8564 -8,188 -375.91
5 8564 -8,229 -334.97
6 8564 -8,270 -293.83
7 8564 -8,311 -252.48
8 8564 -8,353 -210.92
9 8564 -8,395 -169.16
10 8564 -8,437 -127.18
11 8564 -8,479 -85.00
12 8564 -8,521 -42.61

Q:RECURRING DEPOSIT OF 10000 AT 120 MONTHS AND MONTHLY COMPOUNDING INTEREST OF 1% PER MONTH
12% 1%
10000 Rs. -2,323,390.76
120
 10.00% 11.00% 12.00% 13.00% 14.00%
0.83% 0.92% 1.00% 1.08% 1.17%

Rs. -8,719 Rs. -8,758 Rs. -8,797 Rs. -8,836 Rs. -8,875
Rs. -4,576 Rs. -4,618 Rs. -4,661 Rs. -4,703 Rs. -4,746
Rs. -3,200 Rs. -3,244 Rs. -3,289 Rs. -3,333 Rs. -3,378
Rs. -2,515 Rs. -2,561 Rs. -2,607 Rs. -2,654 Rs. -2,701
Rs. -2,107 Rs. -2,154 Rs. -2,202 Rs. -2,251 Rs. -2,300

% PER MONTH