Question
Calculate the (a) net present value (NPV), (b) profitability index (PI), and (c) internal rate of return (IRR) for Projects 1 and 2 (cash flows
Calculate the
(a)
net present value (NPV),
(b)
profitability index (PI), and
(c)
internal rate of return (IRR) for Projects 1 and 2 (cash flows shown below), assuming a required return of
10%.
Year | Project 1 | Project 2 |
|
0 | $380 | $410 | |
1 | $160 | $110 | |
2 | $170 | $130 | |
3 | $140 | $150 | |
4 | $360 | $310 |
a.What is the NPV of Project 1?
$nothing
(Round to the nearest cent.)
What is the NPV of Project 2?
$nothing
(Round to the nearest cent.)
b. What is the PI of Project 1?
nothing
(Round to two decimal places.)
What is the PI of Project 2?
nothing
(Round to two decimal places.)
c. What is the IRR of Project 1?
nothing%
(Round to two decimal places.)
What is the IRR of Project 2?
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