Question

Calculate the NPV and IRR of the following project and check whether they produce the same decision. After-tax initial investment is $68,450; after-tax cash flows at each of the following six year ends are $22,750. The year-end cash flow at year 7 is $41,900. Assume k is 20 percent. (Round present value factor calculations to 6 decimal places, e.g. 1.251242 and the final answers to 2 decimal places e.g. 1,971.25 or 15.25% .) Question 4Answer a. NPV= 17,998.78 ; IRR = 28.8% ; NPV and IRR produce the same decision b. NPV= 19,452.97 ; IRR = 18.95% ; NPV and IRR produce the different decision c. NPV= 18,898.87 ; IRR = 29.01% ; NPV and IRR produce the same decision

          Calculate the NPV and IRR of the following project and check whether they produce the same decision. After-tax initial investment is $68,450; after-tax cash flows at each of the following six year ends are $22,750. The year-end cash flow at year 7 is $41,900. Assume k is 20 percent. (Round present value factor calculations to 6 decimal places, e.g. 1.251242 and the final answers to 2 decimal places e.g. 1,971.25 or 15.25% .)
Question 4Answer
a.
NPV= 17,998.78 ; IRR = 28.8% ; NPV and IRR produce the same decision
b.
NPV= 19,452.97 ; IRR = 18.95% ; NPV and IRR produce the different decision
c.
NPV= 18,898.87 ; IRR = 29.01% ; NPV and IRR produce the same decision

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