1. Compute the NPV and the IRR for each investment Round present value calculations and your final NPV answers to the nearest dollar. Round IRR answers to the nearest whole percent. Project 1 Project II NPV IRR
1. Compute the NPV and the IRR for each investment Round present value calculations and your final NPV answers to the nearest dollar. Round IRR answers to the nearest whole percent. Project 1 Project II NPV IRR
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question

Transcribed Image Text:Net Present Value Versus Internal Rate of Return
for discount factors use Exhibit 128-1 and Exhibit 128-2.
Skiba Company is thinking about two different modifications to its cument manufacturing process. The after-tax cash flows associated with the two investments
follow
Year
D
1
2
Project I
$(100,000)
Project 1
Project II
134,560
Skiba's cost of capital is 10%.
Required:
1. Compute the NPV and the IRR for each investment. Round present value calculations and your final NPV answers to the nearest dollar. Round IRR
answers to the nearest whole percent.
Project II
$(100,000)
63,857
63,857
NPV
IRR
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