## 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: