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You want to analyze the impact of a new project that will cause its cash flows to increase 12,000 over last year's, and continue to
You want to analyze the impact of a new project that will cause its cash flows to increase 12,000 over last year's, and continue to grow at a constant rate of 7% per year for the foreseeable future. The discount rate is 13.5%. Analyze the project in three ways: a. Calculate the NPV and IRR of this project based on an initial investment cost of $97,000 and the change in cash flows each year, assuming the growth continues forever. . b. Find the NPV and IRR of this project if the project only generates cash flows for 17 years
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