Dropdowns:
1) 9266330
9406225
10793380
9683213
2) 1380398
1533775
1303709
1610464
3) stay the same
increase
decrease
NPV = Present value of cash inflows – Present value of cash outflows
IRR is the rate at which NPV = 0
Hence, initial Investment = 2,000,000/(1.146) + 3,750,000/(1.146)2 + 3,750,000/(1.146)3 + 3,750,000/(1.146)4
= $9,266,329.61
i.e. $9,266,330
NPV = 2,000,000/(1.08) + 3,750,000/(1.08)2 + 3,750,000/(1.08)3 + 3,750,000/(1.08)4
– 9,266,330
= $1,533,775
IRR will decrease
Dropdowns: 1) 9266330 9406225 10793380 9683213 2) 1380398 1533775 1303709 1610464 3) stay the same increase...
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