Question
please shows work for the following questions: 1. You are analyzing a potential project that will cost 1750 to invest in today, will generate cash
please shows work for the following questions:
1. You are analyzing a potential project that will cost 1750 to invest in today, will generate cash inflows of 225 per year starting in one year and continuing forever, and has a discount rate of 10%. What is the IRR of the project? Should you accept the project based on its IRR?
2. You also have a second project that will also cost 1750 to invest in today, and will generate cash inflows of 300, 500, 590, and 1000 at the end of each of the next four years. If the discount rate is 10%, what is the MIRR and should you accept the project based on the MIRR?
3. You have a third project that will cost 1700 to invest in today, will generate cash flows of 50, 100, 200, and 250 at the end of each of the next four years, with cash flows continuing to grow at a constant rate of 3% starting with the fourth cash flow and continuing forever. If the discount rate is 15%, what is the NPV and should you accept the project based on the NPV?
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