Question: please do not use excel and show all formulas and work. 1. You are considering a project that costs $500 to invest in today, and

please do not use excel and show all formulas and work.

1. You are considering a project that costs $500 to invest in today, and will pay you $100 next year, $50 in two years, and $100 in three years. The cash inflow will grow at a constant rate of 3% per year after year 3, and you will receive cash inflows for 25 years (total including the first three CFs). Your discount rate is 14%. What is the NPV of the project? Also, what would the NPV be if the cash inflows continued forever? Show your work.

2. Calculate the MIRR of the following project. Your initial investment cost is $180, and you will receive cash inflows of $55, $142, and $35 over the next three years. The discount rate is 13%. Show all of your work (written out, not an Excel file). Round to the nearest 0.01%.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!