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1) a) Suppose that free cash Now of a five year investment is 500 000 for each of the next five years . The investment
1) a) Suppose that free cash Now of a five year investment is 500 000 for each of the next five years . The investment (purchase of a machine) will have a salvage value of 400 000 in year 6. The cost of investment is 2 000 000. Given this information, write the relevant equation which we use to find the IRR by using the information above (I only want you to write the correct equation. I do not want its solution) b) Calculate the net PV of that project assuming a relevant discount rate of 20%.
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