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What is the net present value of the investment

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Reference no: EM132240490

Question -

a: The projected net cash flows for an investment are (in £'000):

Y0: -950

Y1: 130

Y2: 200

Y3: 330

Y4: 270

Y5: 180

What is the net present value of the investment, assuming a 7% cost of capital and a 950 initial investment. What is the NPV when we change the cost of capital to 8% and have a 850 initial investment? Have a 9% cost of capital and a 825 initial investment? Or have a 6% cost of capital and a 900 initial investment?

b: Given the cash flow in the prior question (a) and for the $900 initial investment, what is the IRR of the cash flows?

Reference no: EM132240490

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