Best Industries is considering an investment project that has the following cash flows: Year 0…………… $ -1,200 Year 1………………. 200 Year 2……………….. 200 Year 3……………….. 800 Year 4………………… 300 The company’s discount rate for such calculations is 10%   1. For Best Industries what is the project’s IRR? a. 10.00% b. 11.92% c. 22.75% d. 8.40% 2. For Best Industries what is the NPV? a. $153 b. $ -46.94 c. $375.44 d. $ -153.06 3. Internal rate of return is also: a. Yield b. Rate of return c. Discount rate that makes the NPV equal to zero d. All of the above

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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Best Industries is considering an investment project that has the following cash flows:
Year 0…………… $ -1,200
Year 1………………. 200
Year 2……………….. 200
Year 3……………….. 800
Year 4………………… 300
The company’s discount rate for such calculations is 10%

 

1. For Best Industries what is the project’s IRR?
a. 10.00%
b. 11.92%
c. 22.75%
d. 8.40%

2. For Best Industries what is the NPV?
a. $153
b. $ -46.94
c. $375.44
d. $ -153.06

3. Internal rate of return is also:
a. Yield
b. Rate of return
c. Discount rate that makes the NPV equal to zero
d. All of the above

 

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