Your project organization has to decide whether or not to invest in a project opportunity. The following information is available to you.
Initial cash outflow = $200,000 in the current year (year 0), and $50,000 in the next year
Cash inflows = $75,000 in year 1, $100,000 in year 2, $150,000 in year 3, and $25,000 in year 4
Required rate of return = 15%
Inflation rate = 4%
Calculate the NPV for this project.
Calculate the IRR for this project.
Please show the formule on how did you got the answer.