NPV and IRR: Unequal Annual Net Cash Inflows Assume that Goodrich Petroleum Corporation is evaluating a capital expenditure proposal that has the following predicted cash flows: Initial Investment $(160,000) Operation Year 1 Year 2 Year 3 Salvage 42,000 95,000 65,000 0 a. Using a discount rate of 10%, determine the net present value of the investment proposal. $ b. Determine the proposal's internal rate of return. (Refer to Appendix 24B if you use the table approach.) Hint: You will need to use a trial-and-error approach. Round to the nearest percent. (Example: 0.15268 = 15%). %

NPV and IRR: Unequal Annual Net Cash Inflows Assume that Goodrich Petroleum Corporation is evaluating a capital expenditure proposal that has the following predicted cash flows: Initial Investment $(160,000) Operation Year 1 Year 2 Year 3 Salvage 42,000 95,000 65,000 0 a. Using a discount rate of 10%, determine the net present value of the investment proposal. $ b. Determine the proposal's internal rate of return. (Refer to Appendix 24B if you use the table approach.) Hint: You will need to use a trial-and-error approach. Round to the nearest percent. (Example: 0.15268 = 15%). %

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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