Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the following information for the next 3 questions. Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: What

image text in transcribed
image text in transcribed
image text in transcribed
Use the following information for the next 3 questions. Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: What is the NPV for the project if the company requires a return of 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Question 24 1.5pts This project has two IRRs. What is the smaller IRR? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., enter 32.16 for 32.16%.) Problems with solving the question? See the video instruction. Additional hint: 1. If you use IRR function in Excel, you need to think about the value of the "guess" parameter. Drawing a plot is very necessary, and make sure you can see the two intersection points on your plot. 2. If you don't get to see two intersection points, try starting your discount rate from a very negative number (let's say -80\%), and work all the way up to a very positive number. Remember, mathematically, IRRs are the discount rates that make NPV zero, and they don't have to be positive, again, mathematically. This project has two IRRs. What is the larger IRR? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., enter 32.16 for 32.16%.) Problem with solving the question? See the video instruction. Additional hint: 1. If you use IRR function in Excel, you need to think about the value of the "guess" parameter. Drawing a plot is very necessary, and make sure you can see the two intersection points on your plot. 2. If you don't get to see two intersection points, try starting your discount rate from a very negative number (let's say 80% ), and work all the way up to a very positive number. Remember, mathematically, IRRs are the discount rates that make NPV zero, and they don't have to be positive, again, mathematically. Use the following information for the next 3 questions. Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: What is the NPV for the project if the company requires a return of 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Question 24 1.5pts This project has two IRRs. What is the smaller IRR? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., enter 32.16 for 32.16%.) Problems with solving the question? See the video instruction. Additional hint: 1. If you use IRR function in Excel, you need to think about the value of the "guess" parameter. Drawing a plot is very necessary, and make sure you can see the two intersection points on your plot. 2. If you don't get to see two intersection points, try starting your discount rate from a very negative number (let's say -80\%), and work all the way up to a very positive number. Remember, mathematically, IRRs are the discount rates that make NPV zero, and they don't have to be positive, again, mathematically. This project has two IRRs. What is the larger IRR? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., enter 32.16 for 32.16%.) Problem with solving the question? See the video instruction. Additional hint: 1. If you use IRR function in Excel, you need to think about the value of the "guess" parameter. Drawing a plot is very necessary, and make sure you can see the two intersection points on your plot. 2. If you don't get to see two intersection points, try starting your discount rate from a very negative number (let's say 80% ), and work all the way up to a very positive number. Remember, mathematically, IRRs are the discount rates that make NPV zero, and they don't have to be positive, again, mathematically

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

Handbook Of Blockchain Digital Finance And Inclusion

Authors: David Lee, Robert H. Deng

1st Edition

012812282X, 978-0128122822

More Books

Students also viewed these Finance questions

Question

Apply your own composing style to personalize your messages.

Answered: 1 week ago

Question

Format memos and e-mail properly.

Answered: 1 week ago