Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You have 3 projects with the following cash flows: 0 3 $19 $79 Year Project 1 Project 2 Project 3 - $148 -827 22 2
You have 3 projects with the following cash flows: 0 3 $19 $79 Year Project 1 Project 2 Project 3 - $148 -827 22 2 $39 0 59 $59 7,000 0 -6,495 - 245 40 80 a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1%). c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? a. For which of these projects is the IRR rule reliable? (Select from the drop-down menus.) ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be The IRR rule is reliable for project 1 . Unless all of the negative cash flows of the project precede the positive multiple IRRs or the IRR may not exist. b. Estimate the IRR for each project (to the nearest 1%). The IRR for project 1 is 10 %. (Round to the nearest integer.) The IRR for project 2 is 10 %. (Round to the nearest integer.) The IRR for project 3 is 11 %. (Round to the nearest integer.) c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? The NPV for project 1 for a cost of capital of 5% is $ . (Round to the nearest cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started