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You have 3 projects with the following cash flows: (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project 1 Project 2 -$148 -825 22 Project 3 1 $20 0 39 The IRR for project 1 is The IRR for project 2 is $40 2 62 a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1%). c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? 0 10 %. (Round to the nearest integer.) 10%. (Round to the nearest integer) $58 7,002 82 3 a. For which of these projects is the IRR rule reliable? (Select from the drop-down menus.) The IRR rule is reliable for project 1. Unless all of the negative cash flows of the project precede the positive ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be multiple IRRS or the IRR may not exist. b. Estimate the IRR for each project (to the nearest 1%). The IRR for project 3 is 10%. (Round to the nearest integer) c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? The NPV for project 1 for a $80 cost of capital of 5% is $ (Round to the nearest cent.) -6,496 -247 He

You have 3 projects with the following cash flows: (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project 1 Project 2 -$148 -825 22 Project 3 1 $20 0 39 The IRR for project 1 is The IRR for project 2 is $40 2 62 a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1%). c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? 0 10 %. (Round to the nearest integer.) 10%. (Round to the nearest integer) $58 7,002 82 3 a. For which of these projects is the IRR rule reliable? (Select from the drop-down menus.) The IRR rule is reliable for project 1. Unless all of the negative cash flows of the project precede the positive ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be multiple IRRS or the IRR may not exist. b. Estimate the IRR for each project (to the nearest 1%). The IRR for project 3 is 10%. (Round to the nearest integer) c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? The NPV for project 1 for a $80 cost of capital of 5% is $ (Round to the nearest cent.) -6,496 -247 He

Essentials Of Investments
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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You have 3 projects with the following cash flows: (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project 1 Project 2 -$148 -825 22 Project 3 1 $20 0 39 2 $40 0 62 3 $58 7,002 82 a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1%). c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? $80 -6,496 -247 (Round to the nearest cent.) GHIDO a. For which of these projects is the IRR rule reliable? (Select from the drop-down menus.) The IRR rule is reliable for project 1. Unless all of the negative cash flows of the project precede the positive ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be multiple IRRS or the IRR may not exist. b. Estimate the IRR for each project (to the nearest 1%). The IRR for project 1 is 10%. (Round to the nearest integer.) The IRR for project 2 is 10%. (Round to the nearest integer.) The IRR for project 3 is 10 %. (Round to the nearest integer) c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? The NPV for project 1 for a cost of capital of 5% is $
Transcribed Image Text:You have 3 projects with the following cash flows: (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project 1 Project 2 -$148 -825 22 Project 3 1 $20 0 39 2 $40 0 62 3 $58 7,002 82 a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1%). c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? $80 -6,496 -247 (Round to the nearest cent.) GHIDO a. For which of these projects is the IRR rule reliable? (Select from the drop-down menus.) The IRR rule is reliable for project 1. Unless all of the negative cash flows of the project precede the positive ones, the IRR rule may give the wrong answer and should not be used. Furthermore, there may be multiple IRRS or the IRR may not exist. b. Estimate the IRR for each project (to the nearest 1%). The IRR for project 1 is 10%. (Round to the nearest integer.) The IRR for project 2 is 10%. (Round to the nearest integer.) The IRR for project 3 is 10 %. (Round to the nearest integer) c. What is the NPV of each project if the cost of capital is 5%? 20%? 50%? The NPV for project 1 for a cost of capital of 5% is $
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