Question

What is the NPP and IRR for the following projects with a lifespan of 5 years...

What is the NPP and IRR for the following projects with a lifespan of 5 years and rate of return is 15%.

Project A

Initial investment - $715,000

Cash flow (year 1-4) - $465,992

Terminal cash flow (5) - $573,992

Project B

Initial investment - $715,000

Cash flow (year 1-4) $ 235,480

Terminal cash flow (5) $345,480

I've calculated these on my calculator but want to double check my answer.

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Answer #1

Project A

NPV = $900,772.5458

IRR = 59.78297994%

CF0 = -715,000 ENTER

Down Arrow

CO1 = 465,992 ENTER

Down Arrow

FO1 = 4 ENTER

Down Arrow

CO2 = 573,992 ENTER

FO2 = 1

Press NPV

SET I = 15 ENTER

Down Arrow

CPT NPV

NPV = 900,772.5458

IRR CPT

IRR = 59.78297994

Project B

NPV = -$543,235.3815

IRR = -13.53837894%

CF 2ND CE|C to clear work

CF0 = -715,000 ENTER

Down Arrow

CO1 = 235,480 ENTER

Down Arrow

FO1 = 4 ENTER

Down Arrow

CO2 = 345,480 ENTER

Press NPV

Set I = 15 ENTER

Down Arrow

CPT

NPV = $129,054.92

IRR CPT

IRR = 22.0019%

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