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Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Cash Flow 0 $1,330,000 505,000 570,000 465,000 420,000
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Cash Flow 0 $1,330,000 505,000 570,000 465,000 420,000 Year 2 4 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 5 percent. If Anderson uses a required return of 15 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 and round your answers to 2 decimal places, e.g., 32.16. Enter your IRR as a percent.) NPV IRR $ 339685 18.2791 %
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