Question
The cash flows for three independent projects are found below: Year 0 (Initial investment) $(55,000) $(120,000) $(440,000) Year 1 $12,000 $27,000 $240,000 Year 2 14,000
The cash flows for three independent projects are found below:
| Year 0 (Initial investment) | $(55,000) | $(120,000) | $(440,000) | |||
| Year 1 | $12,000 | $27,000 | $240,000 | |||
| Year 2 | 14,000 | 27,000 | 240,000 | |||
| Year 3 | 22,000 | 27,000 | 240,000 | |||
| Year 4 | 26,000 | 27,000 | ||||
| Year 5 | 32,000 | 27,000 |
.
a.Calculate the IRR for each of the projects.
b.If the discount rate for all three projects is
9
percent,
which project or projects would you want to undertake?
c.What is the net present value of each of the projects where the appropriate discount rate is
9
percent?
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International Trade Finance
Authors: Indian Institute Of Banking & Finance
1st Edition
9386394723, 978-9386394729
