Question
The cash flows for three independent projects are found below: Year 0 (Initial investment) $(70,000) $(110,000) $(420,000) Year 1 $11,000 $28,000 $220,000 Year 2 17,000
The cash flows for three independent projects are found below:
| Year 0 (Initial investment) | $(70,000) | $(110,000) | $(420,000) | |||
| Year 1 | $11,000 | $28,000 | $220,000 | |||
| Year 2 | 17,000 | 28,000 | 220,000 | |||
| Year 3 | 21,000 | 28,000 | 220,000 | |||
| Year 4 | 26,000 | 28,000 | ||||
| Year 5 | 33,000 | 28,000 |
.
a. Calculate the IRR for each of the projects.
b. If the discount rate for all three projects is 13 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 13 percent?
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Principles Of Banking
Authors: Allyn C Buzzel
11th Edition
089982689X, 9780899826899
