Problem 12-17 Net present value and internal rate of return methods [LO4]

The Hudson Corporation makes an investment of $19,000 that provides the following cash flow:

Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

Year	Cash Flow
1	$	10,000
2		10,000
3		7,000

a)

What is the net present value at 12 percent discount rate? (Round "PV Factor" to 3 decimal places. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

(b)

What is the internal rate of return using the interpolation procedure?

(c)	Would you make the same decision under both parts a and b?