Dominika Co. has €20,000 to invest for a five-year period. She could deposit it in a bank earning 8% per year compound interest. She has been offered an alternative: 

Investment in a low-risk project that is expected to produce net cash inflows of €6,500 for each of the first three years, €7,500 in the fourth year, and €3,000 in the fifth year. 

Calculate the NPV Method and the Internal Rate of Return

Answer rating: 100% (QA)

To calculate the Net Present Value NPV and Internal Rate of Return IRR for both investment options we need to discount the cash flows to their present ... View the full answer