Question

Consider a project with a required return of R percent that costs $ I and will last for N years. The project uses straight-line depreciation to zero over the N-year life; there are neither salvage value nor net working capital requirements.
a. At the accounting break-even level of output, what is the IRR of this project? The payback period? The NPV?
b. At the cash break-even level of output, what is the IRR of this project? The payback period? The NPV?
c. At the financial break-even level of output, what is the IRR of this project? The payback period? The NPV?



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  • CreatedAugust 28, 2014
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