(Related to Checkpoint 11.1 and Checkpoint 11.4) (NPV and IRR calculation) East Coast Television is considering a project with an initial outlay of $X (you will have to determine this amount).It is expected that the project will produce a positive cash flow of $56,000 a year at the end of each year for the next 14 years. The appropriate discount rate for this project is 7 percent. If the projecthas an internal rate of return of 9 percent, what is the project's net present value?a. If the project has an internal rate of return of 9%, then the project's initial outlay is $ 436024.42. (Round to the nearest cent.)b. If the discount rate is 7%, then the project's NPV is $(Round to the nearest dollar.)

Step 1:a)We have to calculate the initial investment amount.Internal rate return states that it is…

Answered: (Related to Checkpoint 11.1 and…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter14: Real Options

Section: Chapter Questions

Problem 4MC

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