Computation of present value and internal rate of return

Reference no: EM13826122

Problem:

Your company is planning to install a new facility in its Edmonton plant for manufacturing air cleaning equipment for coal fired power stations. The project life is 8 years. MARR (the minimum attractive rate of return) is i%. The anticipated after tax' cash flows of the project (in millions of dollars) are given below:

End of year	0	1	2	3	4	5	6	7	8
Cash flow	-6.5	2.0	2.0	2.0	X+2.0	2.0	2.0	2.0	Y+2.0

Determine:

the value of Y if the present value of the project is $4,600,000, X = 0 and I = 12% (monthly compounding)
the present value of the Project if Y = X, the equivalent uniform annual value of the project is 1.5X and I = 10% (yearly compounding)
the value of Y if X = 0, i = 10% (yearly compounding) and the external rate of return of the Project is 20%
the internal rate of return if X = -3.0 and Y =1.0
the minimum value of X that would make the project (economically) acceptable if i = 10 % (yearly compounding) and Y = 4X

Additional Information:

This question is generally belongs to the Finance as well as it explains about computation of present value and internal rate of return for the project.

Reference no: EM13826122

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