Question: 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)
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%
a. Calculate the NPV for this project.
b. Calculate the IRR for this project.
Step by Step Solution
★★★★★
3.30 Rating (153 Votes )
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
To calculate the Net Present Value NPV for the project we need to discount the cash inflows and outf... View full answer
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock