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Problem 2 2 - 0 2 An investment costs $ 1 8 , 9 5 5 and will generate cash flow of $ 5 ,
Problem
An investment costs $ and will generate cash flow of $ annually for five years. The firm's cost of capital is percent. Use Appendix to answer the questions.
a What is the investment's IRR? Round your answer to the nearest whole number.
Based on the IRR, should the firm make the investment?
The investment made.
b What is the investment's NPV Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.
$
Based on the NPV should the firm make the investment?
The investment made.
c Do the NPVs and the IRRs suggest the same courses of action?
The net present value and the internal rate of return suggest courses of action.
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