Question

A project that provides annual cash flows of $20,500 for 7 years costs $82,000 today. a. If the required return is 10 percent, what is the NPV for this project?

Determine the IRR for this project.

Answer #1

Net present value = Present value of cash flows - Initial cost

Net present value = [$20,500 * PVAF(10% , 7 years)] - $82,000

Net present value = [$99,802.59 - $82,000]

**Net present value = $17,802.59**

**Computation of IRR**.

Discount rate @ 15%

Net present value = ($20,500 * 4.16042) - $82,000 = $3,288.605

Discount rate @ 17%

Net present value = ($20,500 * 3.92238) - $82,000 =
**-** $1,591.21

By using Interpolation method.

IRR = Lower rate + [(NPV @ lower rate / Change in NPV) * Change in interest rates]

IRR = 15% + [($3,288.605 / $4,879.812) * 2%]

**IRR = 16.33%**

34. A project that provides annual cash flows of $17,000 for 6
years costs $60,000 today. a. If the required return is 10 percent,
what is the NPV for this project?
a. If the required return is 10 percent, what
is the NPV for this project?
b. Determine the IRR for this project.

A project that provides annual cash flows of $2,900 for 10 years
costs $15,300 today.
Required: (a) If the required return is 8 percent, what is the
NPV for this project?
(b) Determine the IRR for this project.

A project that provides annual cash flows of $11,300 for 9 years
costs $60,209 today.
a. If the required return is 16 percent, what is the NPV for
this project?
b. Determine the IRR for this project.

A project that provides annual cash flows of $12,800 for 12
years costs $87,215 today.
a. If the required return is 13 percent, what
is the NPV for this project?
b. Determine the IRR for this project.

A project that provides annual cash flows of $18,100 for eight
years costs $87,000 today. What is the NPV for the project if the
required return is 7 percent? What is the NPV for the project if
the required return is 19 percent? At what discount rate would you
be indifferent between accepting the project and rejecting it?

A project that provides annual cash flows of $21,000 for 6 years
costs $61,000 today.
1) If the required return is 14 percent, what is the NPV for this
project?
A) $18.595.82
B) $20,662.02
C) $22,728.22
D) $23,761.32
E) $24,794.42
2) Determine the IRR for this project.
A) 25.70%
B) 23.13%
C) 28.27%
D) 30.84%
E) 29.55%

A project that
provides annual cash flows of $17,300 for nine years costs $79,000
today.
THREE QUESTIONS:
What is the NPV for
the project if the required return is 8 percent
What is the NPV for
the project if the required return is 20 percent
At what discount rate
would you be indifferent between accepting the project and
rejecting it ?

A project that provides annual cash flows of $13,738 for eight
years costs $84,486 today. What is the NPV for the project if the
required return is 7 percent? (Negative amount should be indicated
by a minus sign. Round your answer to the nearest dollar. (e.g.,
32.16)

A project that provides annual
cash flows of $2,700 for nine years costs $8,800 today.
Requirement
1:
At a required return of 9 percent, what is the NPV of the
project? (Do not round intermediate calculations. Round
your answer to 2 decimal places (e.g.,
32.16).)
NPV
$
Requirement
2:
At a required return of 28 percent, what is the NPV of the
project? Use the IRR function. (Do not round intermediate
calculations. A negative amount should be indicated by a...

Calculating NPV and IRR. A project that
provides annual cash flows of $1,710 for 10 years costs $7,560
today.
1. The NPV is $__________if the required rate of return is
10%.
2. The NPV is $__________if the required rate of return is
24%.
3. At what discount rate would you be indifferent between
accepting the project and rejecting it? I would be indifferent at
_____%
4. Using a finnancial calculator please show and explain
work.

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