Homework Answers
Cash Flows are as below (all figs in $ Mn)
Year 0 = -2
Year 1 = 13.5
Year 2 = -12
The IRR of the above cashflow values is 5.32%
(Use function IRR in excel)
Thus, the IRR will start turning negative for a WACC (discount
rate) greater than 5.32%
Thus, the NPV curve mentioned above in A is correct
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