Question: Please show all steps Using the data provided answer these questions: a)What is the present net value of this investment? b)What is the internal rate
Please show all steps
Using the data provided answer these questions: a)What is the present net value of this investment? b)What is the internal rate of return with no explicit reinvestment considered? c)Detemerine the internal rate of return and NPV assuming the stated reinvestment rate. Why are the results different then part b d)What would happen to the IRR and NPV if the reinvestment rate is higher than the IRR with no explicit reinvestment.Please explain and justify with numerical examples e)Knowing all the investment measures calculated, is it something the investor should proceed with? Justify and explain with reference to each of the measures calculated?
\begin{tabular}{|r|r|r|} \hline & Year & After-Tax Cash Flow \\ \hline Cost & 0 & $500,000 \\ \hline & 1 & $25,000 \\ \hline & 2 & $28,000 \\ \hline & 3 & $30,000 \\ \hline & 4 & $32,000 \\ \hline & 5 & $35,000 \\ \hline & 6 & $36,000 \\ \hline & 7 & $40,000 \\ \hline & 8 & $40,000 \\ \hline & 9 & $42,000 \\ \hline & 10 & $450,000 \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Investor's yield: j1 & 5% \\ \hline Reinvestment rate: j1 & 4% \\ \hline & part (c) \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline includes disposition value & \\ \hline & \\ \hline \end{tabular}
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