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
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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
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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