Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow -$37,000,000 55,500,000 -12,000,000 1 2 a. If the company requires a return of 8 percent on its investments, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the IRRS for this project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter the larger IRR in the first answer box and the smaller IRR in the second answer box. If you can only calculate one IRR, enter it in both boxes to receive partial credit. A negative answer should have a minus sign.)

Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow -$37,000,000 55,500,000 -12,000,000 1 2 a. If the company requires a return of 8 percent on its investments, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the IRRS for this project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter the larger IRR in the first answer box and the smaller IRR in the second answer box. If you can only calculate one IRR, enter it in both boxes to receive partial credit. A negative answer should have a minus sign.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 4P

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