For each of the following cash flows, find their net present value (in year 0) for an
Question:
For each of the following cash flows, find their net present value (in year 0) for an annual discount rate of 10% and their internal rate of return. Write each NPV in dollars and each IRR in percent using two decimals.
Blanks 1-2/A. -$300 in year 1, $100 in year 2, $400 in year 3 (write NPV in Blank 1, IRR in Blank 2)
Blanks 3-4/B. -$200 in year 1, $200 in year 2, $200 in year 3 (write NPV in Blank 3, IRR in Blank 4)
Blanks 5-6/C. -$600 in year 1, $900 in year 3 (write NPV in Blank 5, IRR in Blank 6)
Blanks 7-8/D. $500 in year 1, -$200 in year 2, -$200 in year 3 (write NPV in Blank 7, IRR in Blank 8)
Blanks 9-10 If your company could choose one of these for a future project's payment cycle, which one would you recommend based on NPVs (Blank 9) or IRRs (Blank 10): A, B, C, or D? (they could be the same)
Options:
Blank # 1 | |
Blank # 2 | |
Blank # 3 | |
Blank # 4 | |
Blank # 5 | |
Blank # 6 | |
Blank # 7 | |
Blank # 8 | |
Blank # 9 | |
Blank # 10 |
Cost Benefit Analysis Concepts and Practice
ISBN: 978-0137002696
4th edition
Authors: Anthony Boardman, David Greenberg, Aidan Vining, David Weimer