The project requires an initial outlay of $1,000,000. It is expected to generate net cash in-flows of $250,000 for the next five years. At the end of five years, Timmy will retire and the equipment will be sold for $500,000 (terminal value). The zoo uses a required rate of 12% to discount this project.
1A. Calculate the projects NPV:
a. $545,385.09
b. $467,350.25
c. $272,320.25
d. $184,907.48
1B. What is the project's IRR:
a. 55.25%
b. 47.65%
c. 32.05%
d. 29.40%