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
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
Section: Chapter Questions
Problem 3CMA
Related questions
Question
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 %](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8ad87420-52d2-4e34-815e-eb9bcb5c95c0%2Fb3ef92ea-894f-4ff6-aa45-cd6bc5d7b6ba%2Fzftm6l_processed.png&w=3840&q=75)
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 %
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College