What is the net present value of each of the projects

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(Related to Checkpoint 11.1 on page 335 and Checkpoint 11.4 on page 344) (IRR and NPV calculation) The cash flows for three independent projects are as follows:

Project A Project B Project C

Year 0 (Initial investment) $(50,000) $(100,000) $(450,000)

Year 1 $ 10,000 $ 25,000 $ 200,000

Year 2 15,000 25,000 200,000

Year 3 20,000 25,000 200,000

Year 4 25,000 25,000 —

Year 5 30,000 25,000 —

a. Calculate the IRR for each of the projects.

b. If the discount rate for all three projects is 10 percent, which project or projects would you want to undertake?

c. What is the net present value of each of the projects where the appropriate discount rate is 10 percent? 20 percent?

Reference no: EM13829611

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