Question
DeBarry Corporation makes an investment of $71,000 that yields the following cash flows: Year Cash Flow 1 $18,000 2 18,000 3 24,000 4 26,000 5
DeBarry Corporation makes an investment of $71,000 that yields the following cash flows:
| Year | Cash Flow | |
| 1 | $18,000 | |
| 2 | 18,000 | |
| 3 | 24,000 | |
| 4 | 26,000 | |
| 5 | 28,000 | |
a. What is the present value with a 7 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?
multiple choice
-
Yes
-
No
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Financial Management Principles And Applications
Authors: Sheridan Titman
9th Edition
0655705457, 9780655705451
