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The net present value (NPV) and internal rate of retum (IRR) methods of investment analysis are interrelated and are sometimes used together to make capital

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The net present value (NPV) and internal rate of retum (IRR) methods of investment analysis are interrelated and are sometimes used together to make capital budgeting decisions. Consider the case of Green Caterpillar Garden Supplies Inc:: Last Tuesday, Green Caterpillar Garden Supplies Inc, lost a portion of its planning and financial data when both its main and its backup servers crashed. The company's CFO remembers that the internal rate of return (IRR) of Project Zeta is 13.2%, but he cant recall how much Green Caterpillar originally invested in the project nor the project's net present value (NPV). However, he found a note yhat detailed the annual net cash flows expected to be generated by Project Zeta. They are: The CFO has asked you to compute Project Zeta's initial investment using the information currently available to you. He has offered the following suggestions and observations: - A project's IRR represents the return the project would generate when its NPV is zero or the discounted value of its cash inflows equals the discounted value of its cash outflows-when the cash flows are discounted using the project's IRR. - The level of risk exhibited by Project Zeta is the same as that exhibited by the company's average project, which means that Project Zeta's net cash flows can be discounted using Green Caterpillar's 7% WACC. Given the data and hints, Project Zeta's initial investment is ; and its NPV is (rounded to the nearest whole doliar). A project's IRR will If the project's cash inflows decrease, and everything eise is unaffected. - The level of risk exhibited by Project Zeta is the sami 1 by the compony's average project, which means that Project Zeta's net cash flows can be discounted using Green VACC. Given the data and hints, Project Zeta's initial investment is , and its NPV is (rounded to the nearest whole dollar). A project's IRR will if the project's cash inflows decrease, and everything else is unaffected. - A project's IRR represents the return the project would generate when its NPV is zero or the dicenunted value of its cast inflows equals the discounted value of its cash outflows-when the cash flows are discounted usin $1,805,269 IRR. - The level of risk exhibited by Project Zeta is the same as that exhibited by the company' Zeta's net cash flows can be discounted using Green Caterpillar's 7% WAcC. Given the data and hints, Project Zeta's initial investment is , and its NPV is (rounded to the nearest whole dollar). A project's IRR will If the project's cash inflows decrease, and everything else is unaffected. - A project's IRR represents the return the project would generate when its NPV is zero or the discounted value of its cash inflows equals the discounted value of its cash outflows-when the cash flows are discounted using the project's IRR. - The level of risk exhibited by Project Zeta is the same as that exhibited by the company's average project, which means that Project Zeta's net cash flows can be discounted using Green Caterpillar's 7% WAcC. Given the data ane 's initial investment is , and its NPV is (rounded to the nearest whole doliar). A project's IRR will If the project's cash inflows decrease, and everything else is unaffected

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