Sunday, 3 August 2014

Problem 8-7 Calculating NPV and IRR [LO 3, 4] A project that provides annual cash flows of $2,800 for nine years costs $9,200 today. Requirement 1: At a required return of 11 percent, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Problem 8-7 Calculating NPV and IRR [LO 3, 4]
A project that provides annual cash flows of $2,800 for nine years costs $9,200 today.

Requirement 1:
At a required return of 11 percent, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

  NPV   $  

Requirement 2:
At a required return of 27 percent, what is the NPV of the project? (Do not round intermediate calculations. A negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)

  NPV   $  

Requirement 3:
At what discount rate would you be indifferent between accepting the project and rejecting it? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

  Discount rate %  


Explanation: