Question: A B C 1 Year Project A Project B 2 0 -76 -259 3 1 15 50 4 2 21 73 5 3 29 82
| A | B | C | |
| 1 | Year | Project A | Project B |
| 2 | 0 | -76 | -259 |
| 3 | 1 | 15 | 50 |
| 4 | 2 | 21 | 73 |
| 5 | 3 | 29 | 82 |
| 6 | 4 | 32 | 119 |
Q1: You've estimated the following cash flows (in $) for two projects:
The required return is 7% for both projects.
a. What is the IRR for project A? b. What is the IRR for project B?
c.What is the NPV of project A?
d.What is the NPV of project B?
Q2:
WH Smith Company is evaluating three projects: A, B, C, with cash flows as given in the table. Each project requires an initial investment of $92,000 and has a required return of 9%.
e. What is the NPV of Project A?
f. What is the NPV of Project B?
g. What is the NPV of Project C?
| Year | A | B | C |
|---|---|---|---|
| 1 | 50,000 | 0 | 20,000 |
| 2 | 40,000 | 50,000 | 40,000 |
| 3 | 20,000 | 50,000 | 40,000 |
| 4 | 10,000 | 40,000 | 40,000 |
Q3. You've estimated the following cash flows (in $) for two projects:
| A | B | C | |
| 1 | Year | Project A | Project B |
| 2 | 0 | -76 | -259 |
| 3 | 1 | 15 | 50 |
| 4 | 2 | 21 | 73 |
| 5 | 3 | 29 | 82 |
| 6 | 4 | 32 | 119 |
The required return is 7% for both projects.
h. What is the IRR for project A?
i.What is the IRR for project b?
j. What is the NPV of project A?
k. What is the NPV of project B?
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