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Calculate the irr for each of the investments

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Reference no: EM132939814

We have two mutually exclusive investments with the following cash flows:

Year         Investment A          Investment B
0                   -$100                 -$100
1                        10                      50
2                        30                        40
3                          50                       30
4                          70                           20

Problem a. Using a financial calculator, calculate the IRR for each of the investments. State your answers in percentages rounded to two decimal places.

Problem ?b. Calculate the NPV profile for each investment, using the discount rates of 0%, 5%, 10%, 15%, 20%, and 25%. Perform this task in an Excel spreadsheet. Cautionary note: If you use the =NPV() function in Excel to calculate the NPVs, it will provide incorrect answers. The NPV() function actually calculates the present value of all cash inflows. The NPV should be calculated as =NPV(all cash inflows) - initial cash outflow.

Reference no: EM132939814

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