Operations Management

Problem 3:

Initial Investment = Cash Flow Year 1 Cash Flow Year 2 + Cash Flow Year Y (1 +IRR) 1 (1+IRR ) 2 (1+IRR)YCash Flow Year 1 Cash Flow Year 2 Cash Flow Year Y NPV = (1 + discount rate)1 (1 + discount rate )2 (1 + discount rate)