A project is being evaluated. The project will create the following cash flows: Year Cash Flow 0 $ 1,290,000 1 465,000 2 530,000 3 425,000 4 380,000 In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are blocked and must be reinvested with the government for one year. The reinvestment rate for these funds is 3 percent. If Anderson uses a required return of 12 percent on this project, what are the NPV and IRR of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter your IRR as a percent.) Whats is the NPV and IRR of the project of the project?
Please use excel to solve and show equations.
A project is being evaluated. The project will create the following cash flows:
| Year | Cash Flow |
|---|---|
| 0 | $ 1,290,000 |
| 1 | 465,000 |
| 2 | 530,000 |
| 3 | 425,000 |
| 4 | 380,000 |
In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are blocked and must be reinvested with the government for one year. The reinvestment rate for these funds is 3 percent. If Anderson uses a required return of 12 percent on this project, what are the NPV and IRR of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter your IRR as a percent.)
Whats is the NPV and IRR of the project of the project?
Please use excel to solve and show equations.
Modern capital budgeting techniques in financial management include NPV (Net Present Value) and IRR (Internal Rate of Return). The approach to determine the difference between the present value of cash input and outflow is called net present value (NPV). The rate that equalizes the present value of outflows and inflows is found using the IRR approach. They differ from one another in some ways. Internal rate of return (IRR) refers to the rate of return estimated by the organization itself in the IRR method.
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