Computation of internal rate of return and npv

Assignment Help Finance Basics

Reference no: EM1313510

Computation of internal rate of return and NPV

Two mutually exclusive investment projects have the following forecasted cash flows:

Year 0: (A) $-20,000 (B) $-20,000
Year 1: (A) $10,000 (B) 0
Year 2: (A) $10,000 (B) 0
Year 3: (A) $10,000 (B) 0
Year 4: (A) $10,000 (B) $60,000

a. Compute the internal rate of return for each project

b. Compute the net present value for each project if the firm has a 10% cost of capital

c. Which project should be adopted? Why?

Reference no: EM1313510

Questions Cloud

Estimating the sample size based on normal distribution : Karefree State University has an enrollment of 18,000. Researchers took a sample of 900 and found 477 students wanted a Field Hockey team. Construct the 95% and 99% Interval estimates for the population proportion.

What is the maximum speed with a 1400 kg rubber-tired car : As an energy-efficiency consultant, you're asked to assess the pumped-storage facility. Its reservoir sits 136 above its generating station and holds 9.0×10^9 of water. The power plant generates 315 of electric power while draining the reservoir over..

Hypotonic and hypertonic concentration : Explain why is 5% (w/v) Sucrose solution hypotonic to the water plant cell, however a 5% (w/v) NaCI solution is hypertonic?

Level of consumer surplus as the price of a good falls : In general, illustrate what happens to the level of consumer surplus as the price of a good falls.

Computation of internal rate of return and npv : Computation of internal rate of return and NPV and compute the net present value for each project if the firm has a 10% cost of capital

Non rejection region under curve of t distribution : If level of significance ( α ) is 0.005 in two-tail test, how large is non rejection region under curve of the t distribution?

Based on your understanding of the gains from trade : Based on your understanding of the gains from trade, do you think which these payoffs actually reflect a nation's welfare under the four possible outcomes.

What are the tension in cable : A floodlight with a mass of 46.00 kg is used to clarify the parking lot in front of a library. The floodlight is supported at the end of horizontal beam that is hinged to a vertical pole. A cable that makes an angle of 29 degrees with the beam is att..

Writing model equation : Question: For all generators: Eg = 1\"\"0°, χ1 = j0.25 For all transformers: χ1 = j0.75 [A] Write the Y and Z matrices. B] Write the model equation. [C] For each bus, find V, ρ and Q.

User Account

All Pages