Problem 10.42
An investment of $83 generates after-tax cash flows of $49 in Year 1, $67 in Year 2, and $131 in Year 3. The required rate of return is 20 percent. The net present value is closest to
1. $49.81.
2. $62.18.
3. $80.17.
4. $41.62
Problem 10.40
Given the following cash flows for a capital project, calculate the NPV and IRR. The required rate of return is 8 percent.
|
Year
|
|
0
|
1
|
2
|
3
|
4
|
5
|
|
Cash Flows
|
$-49901
|
$12873
|
$12524
|
$23846
|
$12306
|
$5555
|
1. NPV=3508. IRR=11.59%
2. NPV=4511. IRR=11.59%
3. NPV=3508. IRR=13.13%
4. NPV=4511. IRR=13.13%