Answer:
1. IRR = 14%
2. NPV = 3.239
3. 12%
Explanation:
The IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested in a project.
NPV is the present value of after tax cash flows from an investment less the amount invested
NPV and IRR can be calculated using a financial calculator
Cash flow in year zero = -137,320
Cash flow each year from year 1 to zero = 40,000
I = 14%
IRR = 14%
NPV = 3.239
If cash in flow each year from year 1 ro 5 was $38,090, the IRR = 12%
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
