If the cash flows for Project M are C0 = -1,000; C1 = +800; C2 = +700 and C3= -200. Calculate the IRR for the project. For what range of discount rates does the project have a positive NPV?

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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If the cash flows for Project M are C0 = -1,000; C1 = +800; C2 = +700 and C3= -200. Calculate the IRR for the project. For what range of discount rates does the project have a positive NPV?

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8. Consider a project with the following cash flows: Co =-€100, C₁ =€200,
C2 =-€75.
a. How many internal rates of return does this project have?
b. Which of the following numbers is the project IRR: (i) -50%; (ii)
-12%; (iii) 5%; (iv) 50%?
c. The opportunity cost of capital is 20%. Is this an attractive project?
Transcribed Image Text:8. Consider a project with the following cash flows: Co =-€100, C₁ =€200, C2 =-€75. a. How many internal rates of return does this project have? b. Which of the following numbers is the project IRR: (i) -50%; (ii) -12%; (iii) 5%; (iv) 50%? c. The opportunity cost of capital is 20%. Is this an attractive project?
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