Question
Below are cash flows for 3 projects, Project Trun, Project Beden and Project Klentun. The MARR is 12%. Year 0 1 2 3 4 5
Below are cash flows for 3 projects, Project Trun, Project Beden and Project Klentun. The MARR is 12%.
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|---|---|
| Trun | -33000 | 8600 | 7000 | 9700 | 8300 | 12300 | 9500 |
| Beden | -11000 | 3600 | 2000 | 4800 | 3300 | 12300 | 2400 |
| Klentun | -10000 | 2000 | 3000 | 3000 | 3000 | 1500 | 1000 |
The IRR of Trun is 16.183931529522%, while Beden is30.37561019361%.
Show your detailed calculations in the workings to be submitted.
a. Calculate the IRR of Klenten. Use trial & error method.
b. What is the Incremental IRR for the projects compared? Show calculations using trial & error method.
Step by Step Solution
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Year 0 1 2 3 4 5 6 Klentun 10000 2000 3000 3000 3000 1500 1000 PV 12 10000 08929 07972 07118 06355 05674 05066 Present Value 1000000 178571 239158 213534 190655 85114 50663 NPV 42304 Since NPV at 12 i...
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A Pathway To Introductory Statistics
Authors: Jay Lehmann
1st Edition
0134107179, 978-0134107172
