Question: Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow 0 $ 40,000,000 1 64,000,000 2
| Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: |
| Year | Cash Flow | ||
| 0 | $ | 40,000,000 | |
| 1 | 64,000,000 | ||
| 2 | 13,000,000 | ||
| a-1 | What is the NPV for the project if the company requires a return of 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| NPV | $ |
| a-2 | Should the firm accept this project? | ||||
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| b. | This project has two IRR's, namely percent and percent, in order from smallest to largest. (Note: If you can only compute one IRR value, you should input that amount into both answer boxes in order to obtain some credit.) (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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