Question
(IRR and NPV calculation)The cash flows for three independent projects are found below: Project A Project B Project C Year 0 (Initial investment) $(65,000) $(120,000)
(IRR and NPV calculation)The cash flows for three independent projects are found below:
| Project A | Project B | Project C | ||||
| Year 0 (Initial investment) | $(65,000) | $(120,000) | $(430,000) | |||
| Year 1 | $11,000 | $26,000 | $210,000 | |||
| Year 2 | 16,000 | 26,000 | 210,000 | |||
| Year 3 | 21,000 | 26,000 | 210,000 | |||
| Year 4 | 24,000 | 26,000 | ||||
| Year 5 | 29,000 | 26,000 | ||||
a.Calculate the IRR for each of the projects.
b.If the discount rate for all three projects is 9 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 9 percent?
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Financial Management Theory And Practice
Authors: Prasanna Chandra
9th Edition
9339222571, 978-9339222574
