Question
(IRR and NPV calculation) The cash flows for three independent projects are as follows: Project A Project B Project C Year 0 (initial Investment) $
(IRR and NPV calculation) The cash flows for three independent projects are as follows:
| Project A | Project B | Project C | |
| Year 0 (initial Investment) | $ (45,000.00) | $ (110,000.00) | $ (400,000.00) |
| Year 1 | $ 12,000.00 | $ 27,000.00 | $ 250,000.00 |
| Year 2 | $ 18,000.00 | $ 27,000.00 | $ 250,000.00 |
| Year 3 | $ 21,000.00 | $ 27,000.00 | $ 250,000.00 |
| Year 4 | $ 28,000.00 | $ 27,000.00 | $ - |
| Year 5 | $ 33,000.00 | $ 27,000.00 | $ - |
a. Calculate the IRR for each of the projects.
b. If the discount rate for all three projects is 14 percent, which project or projects would you want to undertake?
c. What is the net present value of each of the projects where the appropriate discount rate is 14 percent?
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Fundamentals Of Futures And Options Markets
Authors: John Hull
9th Edition
0134083245, 9780134083247
