b läi 5 Find C that makes the two cash flows of Project A & Project B :over 5 years to be equivalent Project A Project B $1000 i=10% i=10% $500 C C о 1 2 3 4 5 0 1 2 3 4 5 $792 O $872 O $972 O $572 O

b läi 5 Find C that makes the two cash flows of Project A & Project B :over 5 years to be equivalent Project A Project B $1000 i=10% i=10% $500 C C о 1 2 3 4 5 0 1 2 3 4 5 $792 O $872 O $972 O $572 O

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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(Related to Checkpoint 11.1 and Checkpoint 11.4) (IRR and NPV calculation) The cash flows for three independent projects are found below: a. Calculate the IRR for each of the projects. b. If the discount rate for all three projects is 13 percent, which project or projects would you want to undertake? c. What is the net present value of each of the projects where the appropriate discount rate is 13 percent? a. The IRR of Project A is%. (Round to two decimal places.) Data table Year 0 (Initial investment) Year 1 Year 2 Year 3 Year 4 Year 5 Project A $(70,000) $12,000 18,000 19,000 28,000 33,000 Project B $(110,000) $28,000 28,000 28,000 28,000 28,000 Project C $(420,000) $240,000 240,000 240,000
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