Consider the following cash flows: a. Confirm that one internal rate of return on this project is

Question:

Consider the following cash flows:

a. Confirm that one internal rate of return on this project is (a shade above) 7% and that the other is (a shade below) 34%.
b. What is project NPV if the discount rate is 5%?
c. What if it is 20%? 40%?
d. Why is NPV positive at midrange discount rates but not at very high or very low rates?

Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...