Howell Petroleum, Ic., is trying to evaluate a generation project with the following cash flows: Year Cash Flow -$37,000,000 55,500,000 -12,000,000 1 2 a. If the company requires a return of 8 percent on its investments, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
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part A only please. 

Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash
flows:
Year
Cash Flow
-$37,000,000
55,500,000
-12,000,000
1
2
a. If the company requires a return of 8 percent on its investments, what is the NPV of
the project? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
b. Compute the IRRS for this project. (Do not round intermediate calculations and enter
your answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter the larger
IRR in the first answer box and the smaller IRR in the second answer box. If you can
only calculate one IRR, enter it in both boxes to receive partial credit. A negative
answer should have a minus sign.)
a. NPV
23.80 %
b. Larger IRR
Smaller IRR
-73.80 %
Transcribed Image Text:Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow -$37,000,000 55,500,000 -12,000,000 1 2 a. If the company requires a return of 8 percent on its investments, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the IRRS for this project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Enter the larger IRR in the first answer box and the smaller IRR in the second answer box. If you can only calculate one IRR, enter it in both boxes to receive partial credit. A negative answer should have a minus sign.) a. NPV 23.80 % b. Larger IRR Smaller IRR -73.80 %
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