The project has a regular payback of 2.25 years. What is the project’s internal rate of return (IRR)? IRR>31% NUBD is considering a project that has an up-front cost and a series of positive cashflows. The project's estimated cash flows are summarized below:ProjectCash Flow?P500 million300 million400 million600 millionYear-2 3 4

Year Cash Flow 0 ? 1 500,000,000 2…

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The project has a regular payback of 2.25 years. What is the project’s internal rate of return (IRR)? IRR>31%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 7P: Your division is considering two investment projects, each of which requires an up-front expenditure...

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Question

The project has a regular payback of 2.25 years. What is the project’s internal rate of return (IRR)? IRR>31%

NUBD is considering a project that has an up-front cost and a series of positive cash
flows. The project's estimated cash flows are summarized below:
Project
Cash Flow
?
P500 million
300 million
400 million
600 million
Year
-2 3 4

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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