A projected non-normal cash flow is shown below whereby a large cash outflow. is expected at...

 

 

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A projected non-normal cash flow is shown below whereby a large cash outflow. is expected at the end of the project so the project has more than one IRR. 0 2 3 -$24.0 $25.0 $19.0 $20.0 4 -$42.0 1. Find one of the exact IRR's using Excel or your financial calculator, then estimate the other IRR using the graph below. 2 points IRR calculated 5.92% IRR estimated 10.40 NPV OF PROJECTED CASH FLOWS $2.00 $1.50 $1.00 $0.50 $1.50 $1.00 $0.50 $0.00 0% 10% 15% 20% 25% 30% 35% 40% 45% -$0.50 -$1.00 -$1.50 -$2.00 -$2.50 2. Based on a WACC of 15%, should the project be accepted? YES or NO and why: 2 points No, because estimated MIKR is 15.74% which is greater than WACC-15% 3. At which discount rate does the NPV of the project appear to be maximized? 1 point 18.00% A projected non-normal cash flow is shown below whereby a large cash outflow. is expected at the end of the project so the project has more than one IRR. 0 2 3 -$24.0 $25.0 $19.0 $20.0 4 -$42.0 1. Find one of the exact IRR's using Excel or your financial calculator, then estimate the other IRR using the graph below. 2 points IRR calculated 5.92% IRR estimated 10.40 NPV OF PROJECTED CASH FLOWS $2.00 $1.50 $1.00 $0.50 $1.50 $1.00 $0.50 $0.00 0% 10% 15% 20% 25% 30% 35% 40% 45% -$0.50 -$1.00 -$1.50 -$2.00 -$2.50 2. Based on a WACC of 15%, should the project be accepted? YES or NO and why: 2 points No, because estimated MIKR is 15.74% which is greater than WACC-15% 3. At which discount rate does the NPV of the project appear to be maximized? 1 point 18.00%