Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: |
Year | Cash Flow |
0 | –$582,000 |
1 | 212,000 |
2 | 155,000 |
3 | 220,000 |
4 | 199,000 |
All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment rate for these funds is 7 percent. Assume Anderson uses a required return of 13 percent on this project. |
|
a. | What is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
Filter Corp. has a project available with the following cash
flows:
Year | Cash Flow | |
0 | −$15,900 | |
1 | 5,300 | |
2 | 6,600 | |
3 | 6,000 | |
4 | 4,400 | |
What is the project's IRR?
1)
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