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larisa [96]
3 years ago
9

Net present value LO P3

Business
1 answer:
maksim [4K]3 years ago
3 0

Answer:

a. initial outlay = -$820,000

net cash flows years 1 - 5 = $240,000

net cash flow year 6 = $340,000

discount rate = 12%

using a financial calculator:

NPV = $217,400.87

IRR = 20.55%

b. initial outlay = -$560,000

net cash flows years 1 - 7 = $150,000

net cash flow year 8 = $206,000

discount rate = 12%

using a financial calculator:

NPV = $207,763.43

IRR = 21.65%

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