Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

the question formulas NPV > 0 = Accept Project NPV = 0 = > No Profit or no loss NPV reject project example Net Present

the question image text in transcribed
formulas
image text in transcribed
NPV > 0 = Accept Project
NPV = 0 = > No Profit or no loss
NPV reject project
example
image text in transcribed
Net Present Value NPV=t=mN(1+k)tFCFPtt=0m1(1+k)t10>0 Where: NPV=NetPresentValueFCFP=FreeCashFlowProject10=InitialOutlays/CashOutflows PV=(1+r)17FVPV=(1+0.08)1100,000+(1+0.08)2200,000+(1+0.08)23,000,000+(1+0.08)44,000,000+(1+0.08)36,000,000+(1+0.08)610,000,000+(1+0.08)650,000,000(1.08)100,000+(1.664)200,000+(1.259712)3,000,000+(1.36048896)4,000,000+(1.469328077)6,000,000+(1.586874323)10,000,000+(1.586874323)50,000,00092,592.5+120,192.3+2,381,496.7+2,940,119.4+4,083,499.1+6,301,696.2+31508481.3=47,428,077PV=$47,428,077.50NPV=$47,428,077050$14,000,000 Your company, ABC Petroleum Corporation uses a minimum of 15% Internal Rate of Return (IRR) guideline for all projects, with no exception. One of the newly hired Reservoir Engineer in your team sent you the data below as project proposal without indicating the IRR. What is the IRR and NPV using the data below? Upload your

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Valuation

Authors: James R. Hitchner

4th Edition

1119286603, 978-1119286608

More Books

Students also viewed these Finance questions

Question

4. How has e-commerce affected business-to-business transactions?

Answered: 1 week ago