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 is in image
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S09-26 Problems with IRR [LO5]
A project has the following cash flows:
Year
Cash Flow
$59,000
- 34,000
39,000
2
a. What is the IRR for this project? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the NPV of this project if the required return is 12 percent? (A negative
answer should be indicated by a minus sign. Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. What is the NPV of the project if the required return is 0 percent? (A negative
answer should be indicated by a minus sign. Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
d. What is the NPV of the project if the required return is 24 percent? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8c64f468-7d35-4863-8518-1bc1a6b8a7bc%2F5feb6999-1cbc-4384-ba39-af77966862ee%2Fqaodbza_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Che
S09-26 Problems with IRR [LO5]
A project has the following cash flows:
Year
Cash Flow
$59,000
- 34,000
39,000
2
a. What is the IRR for this project? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the NPV of this project if the required return is 12 percent? (A negative
answer should be indicated by a minus sign. Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. What is the NPV of the project if the required return is 0 percent? (A negative
answer should be indicated by a minus sign. Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
d. What is the NPV of the project if the required return is 24 percent? (Do not round
intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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