Question
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 $ -1,340,000 1 515,000
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: |
Year | Cash Flow | ||
0 | $ | -1,340,000 | |
1 | 515,000 | ||
2 | 580,000 | ||
3 | 475,000 | ||
4 | 430,000 | ||
All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are blocked and must be reinvested with the government for one year. The reinvestment rate for these funds is 4 percent. |
If Anderson uses a required return of15 percent on this project, what are the NPV and IRR of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter the IRR as a percent. Round your final answers to 2 decimal places (e.g., 32.16).) |
NPV | $ | |
IRR | % | % |
|
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