Question
Given: Your firm is deciding to invest in two different projects. Both have an initial cost of $15million. Estimated future cash flows are as follows:
Given: Your firm is deciding to invest in two different projects. Both have an initial cost of $15million. Estimated future cash flows are as follows:
A. Calculate both projects NPV, assuming the cost of capital is 5%, then 10%, then 15%.
B. What are the projects IRRs at the three costs of capital?
Year123ProjectA$5,000,00010,000,00020,000,000ProjectB$20,000,00010,000,0006,000,000Step by Step Solution
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Risk Management And Financial Institutions
Authors: John Hull
1st Edition
0132397900, 9780132397902
