The net cash flows for a new project are estimated to be as follows:

Year 0 1 2 3 4 Net cash flow (£’000s) –40 16 24 18 14 Use Excel’s IRR function to calculate the yield on the investment. If the cost of capital is 14%, calculate the net present value of the investment using Excel’s NPV function.

(Answers: 29%, £12,941.)