(Calculating IRR and NPV) (Related to Checkpoint 11.1 on page 367 and Checkpoint 11.4 on page 376) The cash flows for three independent projects are as follows:

a. Calculate the IRR for each of the projects.

b. If the discount rate for all three projects is 10 percent, which project or projects would you want to undertake?

c. What is the NPV of each of the projects where the appropriate discount rate is 10 percent? 20 percent?

Transcribed Image Text:

Year Project A 0 (initial investment) $(50,000) Project B $(100,000) Project C $(450,000) 1 $ 10,000 $ 25,000 $ 200,000 2 15,000 25,000 200,000 3 20,000 25,000 200,000 4 25,000 25,000 5 30,000 25,000