Question
Suppose you are offered a project with the following payments: Year Cash Flows 0 $ 7,300 1 4,000 2 2,700 3 1,800 4 1,200 a.
Suppose you are offered a project with the following payments:
Year | Cash Flows | ||||
0 | $ | 7,300 | |||
1 | 4,000 | ||||
2 | 2,700 | ||||
3 | 1,800 | ||||
4 | 1,200 | ||||
a. What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % b. If the appropriate discount rate is 10 percent, should you accept this offer?
-
Accept
-
Reject
c. If the appropriate discount rate is 22 percent, should you accept this offer?
-
Accept
-
Reject
d-1. What is the NPV of the offer if the appropriate discount rate is 10 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $
d-2. What is the NPV of the offer if the appropriate discount rate is 22 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started