Question

You are provided with the following cash flows on a project:
Year Operating (predebt) cash flows ($)
0 .................. −10,000,000
1 .................. 4,000,000
2 .................. 5,000,000
3 .................. 6,000,000
Plot the net present value (NPV) profile for this project.
What is the IRR? If this firm had a cost of capital of
10% and a cost of equity of 15%, would you accept this project?


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  • CreatedApril 15, 2015
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