Recomputed the net present value of the project based on the cost of capital you found. Do

Question:

Recomputed the net present value of the project based on the cost of capital you found. Do you still believe that your earlier recommendation for accepting or rejecting the project was adequate? Why or why not?

Rate of return .... 15%

Year 0.... $3,000,000

Year 1 .... $1,100,000

Year 2.... $1,450,000

Year 3.... $1,300,000

Year 4.... $950,000

1. What is the project’s IRR?

2. What is the project’s NPV?

3. Should the company accept this project and why (or why not)?

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...