Question
You are evaluating a proposed project for your company. The project is expected to generate the following end-of-year cash flows: You have been told you
You are evaluating a proposed project for your company. The project is expected to generate the following end-of-year cash flows: You have been told you should evaluate this project with an interest rate of 9%. What is the project's NPV? $185.79 $151.80 $51.43 $135.60 $119.39
Your group leader has now told you that the risk of the project was understated before. As a result, she tells you to recalculate the projects NPV with an 11% interest rate. What is the new NPV? -$115.38 -$190.92 -$66.36 -$104.13 -$109.76
When the project was first evaluated at 9%, you would have advised that the company the project because it value for the company. But now with an 11% interest rate, you will advise the company to the project because it value for the company. Calculate the projects internal rate of return (IRR). 9.99% 9.41% 12.45% 15.08% 10.01%
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