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NPV and IRR Consider a project with the following cash flows: The appropriate discount rate of the project is 9 % . ( a )

NPV and IRR
Consider a project with the following cash flows:
The appropriate discount rate of the project is 9%.
(a) What is the Net Present Value of the project? Based on the NPV decision rule, should we invest in this
project?
(b) Next, we want to see the dependence of NPV on the discount rate. Plot the NPV for discount rates
in a range of 0% to 40% with an increment of 5%. How many estimates of IRR do we expect for this
project?
(c) Find the IRR using the Excel function "IRR()". As the initial guess, please try 1% and 30%. Based on
the IRR decision rule, can we determine whether to invest or not?
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