- A project's IRR represents the return the project would g equals the discounted value of its cash outflows - when t - The level of risk exhibited by Project Lambda is the sami Project Lambda's net cash flows can be discounted using NPV is zero or the discounted value of its cash inflows 1 discounted using the project's IRR. by the company's average project, which means that r's 10.00\% desired rate of return. Given the data and hints, Project Lambda's initial investment is , and its NPV is (both rounded to the nearest whole dollar). he return the project would generate when its NPV is zero or the discounted yalue of its cash inflows of its cash outflows - when the cash flows are discounted using t $697,251 RR. y Project Lambda is the same as that exhibited by the company's lows can be discounted using Green Caterpillar's 10.00% desired Lambda's initial investment is , and its NPV is (both rounded to the nearest whole 6. Understanding the IRR and NPV The net present value (NPV) and internal rate of retum (1RR) methods of investment analysis are interrelated and are sometimes used together to make capital budgeting decisions. Green Caterpiliar Garden Supplies Inc. lost a portion of ies planning and financial data when its server and its backup server crashed. The campany's CFO remembers that the internal rate of return (IRR) of Project Lambda is 13.20%, but he cant recall how much Green Caterpilar originally invested in the project nor the project's net present value (NPV). However, he found a note that contained the annual net cash flows expected to be generated by Project Lambda. They are: The Cro has asked you to compute Project Lambda's instial investmegt using the information currentiy avalable to you. He has offered the following suggestions and observations: - A project's IRR represents the return the project would generate when its NPV is zero or the discounted value of its cash infows equais the discounted value of its cash outflow-when the cast nows are discounted using the project's lar. - The level of risk exhibited by Project Lambda is the same as that exhibited by the compary's average project, which means that Project Lambda's net cash flows can be discounted using Green Caterpillar's 10.00h desired rate of return