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The cash flows for three independent projects are found below: Project A Project B Project C Year 0 (Initial investment) $(70,000) $(110,000) $(460,000) Year 1
The cash flows for three independent projects are found below:
| Project A | Project B | Project C | ||||
| Year 0 (Initial investment) | $(70,000) | $(110,000) | $(460,000) | |||
| Year 1 | $9,000 | $26,000 | $210,000 | |||
| Year 2 | 18,000 | 26,000 | 210,000 | |||
| Year 3 | 23,000 | 26,000 | 210,000 | |||
| Year 4 | 27,000 | 26,000 | ||||
| Year 5 | 32,000 | 26,000 | ||||
.
a.Calculate the IRR for each of the projects.
b.If the discount rate for all three projects is
12
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
12
percent?
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