Question
1.An investment project has the following cash flows: CF0 = -1,000,000; CF1 - CF5 = 250,000 each. If the required rate of return is 10%:
1.An investment project has the following cash flows: CF0 = -1,000,000; CF1 - CF5 = 250,000 each. If the required rate of return is 10%:
a.What is the NPV of the project? What decision would be reached?
b.What is the IRR (internal rate of return) of the project? What decision would be reached?
c.How are the above two decisions related?
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Principles of Finance
Authors: Scott Besley, Eugene F. Brigham
6th edition
9781305178045, 1285429648, 1305178041, 978-1285429649
