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DeBarry Corporation makes an investment of $52,000 that yields the following cash flows: Year Cash Flow 1 $13,000 2 13,000 3 19,000 4 21,000 5

DeBarry Corporation makes an investment of $52,000 that yields the following cash flows:

Year Cash Flow
1 $13,000
2 13,000
3 19,000
4 21,000
5 23,000

a. What is the present value with a 8 percent discount rate (cost of capital)? (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.)

Net present value $

b. What is the IRR? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

IRR %

c. Would you make the same decision under both parts a and b?

  • Yes

  • No

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