Net Cash Flows and NPVs for different discount rate for projects S and L are given below Net Cash Flows ($) Discount Rate (%) NPVS NPVL Year (t) Project S Project L 0% $800 $1100 0 $(3000) $(3000) 5 554.32 1 1500 400 10 161.33 2 1200 900 15 (90.74) (259.24) 3 800 1300 20 (309.03) (565.97) 4 300 1500 ii) NPVS at 10%: d) What is the IRR for S? (Write down the equation for IRR and then Use an excel worksheet to calculate IRR
Net Cash Flows and NPVs for different discount rate for projects S and L are given below Net Cash Flows ($) Discount Rate (%) NPVS NPVL Year (t) Project S Project L 0% $800 $1100 0 $(3000) $(3000) 5 554.32 1 1500 400 10 161.33 2 1200 900 15 (90.74) (259.24) 3 800 1300 20 (309.03) (565.97) 4 300 1500 ii) NPVS at 10%: d) What is the IRR for S? (Write down the equation for IRR and then Use an excel worksheet to calculate IRR
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...
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Net Cash Flows and NPVs for different discount rate for projects S and L are given below
|
Net Cash Flows ($) |
|
Discount Rate (%) |
NPVS |
NPVL |
|
Year (t) |
Project S |
Project L |
|
0% |
$800 |
$1100 |
0 |
$(3000) |
$(3000) |
|
5 |
|
554.32 |
1 |
1500 |
400 |
|
10 |
161.33 |
|
2 |
1200 |
900 |
|
15 |
(90.74) |
(259.24) |
3 |
800 |
1300 |
|
20 |
(309.03) |
(565.97) |
4 |
300 |
1500 |
|
|
|
|
- ii) NPVS at 10%:
- d) What is the
IRR for S? (Write down the equation for IRR and then Use an excel worksheet to calculate IRR
Equation:
Answer:
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