Given the following cash flows for a capital project, calculate the NPV and IRR. The required rate of return is 8 percent.
Year  

0 
1 
2 
3 
4 
5 

Cash Flows  $37004  $11550  $12750  $16800  $10700  $5350 
NPV=4947. IRR=18.0%
NPV=4947. IRR=9.9%
NPV=9464. IRR=9.9%
NPV=9464. IRR=18.0%
a) We calculate the NPV using NPV function in excel and discount rate = 17.48%
NPV of product line expansion is  $160973 
NPV of production capacity expansion is $1200298
b.
Both projects should be accepted. This is because for both the projects the NPV is positive and the projects are not mutually exclusive.
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