Question

in314 Exam II X G Bulk Purchases just purchased X + c ps i Cloud 1314 Exam II e zto.mheducation.com/hm.tpx Y Yahoo G Google New Tab Question 19 (of 35) value 8.00 points Problem 8-7 Calculating NPV and IRR [LO 3,4] A project that provides annual cash flows of $3,100 for nine years costs $10,400 today. At a required return of 12 percent, what is the NPV of the project? (Do not round intermediate calcula NPV 5 At a required return of 28 percent, what is the NPV of the project? (A negative answer should be indie places, e.g., 32.16.) NPV At what discount rate would you be indifferent between accepting the project and rejecting it? (Do not 32.16.) Discount rate References Worksheet Problem 8-7 Calculating NPV and IRR (LO 3, 2019 MeGromte Educa

Answer 1

Hello Sir/ Mam

(a)

Time	Cashflows	PVF	PV
0	-$10,400.00	1	-$10,400.00
1	$3,100.00	0.892857143	$2,767.86
2	$3,100.00	0.797193878	$2,471.30
3	$3,100.00	0.711780248	$2,206.52
4	$3,100.00	0.635518078	$1,970.11
5	$3,100.00	0.567426856	$1,759.02
6	$3,100.00	0.506631121	$1,570.56
7	$3,100.00	0.452349215	$1,402.28
8	$3,100.00	0.403883228	$1,252.04
9	$3,100.00	0.360610025	$1,117.89
NPV			$6,117.57

(b)

Time	Cashflows	PVF	PV
0	-$10,400.00	1	-$10,400.00
1	$3,100.00	0.78125	$2,421.88
2	$3,100.00	0.610351563	$1,892.09
3	$3,100.00	0.476837158	$1,478.20
4	$3,100.00	0.37252903	$1,154.84
5	$3,100.00	0.291038305	$902.22
6	$3,100.00	0.227373675	$704.86
7	$3,100.00	0.177635684	$550.67
8	$3,100.00	0.138777878	$430.21
9	$3,100.00	0.108420217	$336.10
NPV			-$528.94

(c)

Time	Cashflows
0	-$10,400.00
1	$3,100.00
2	$3,100.00
3	$3,100.00
4	$3,100.00
5	$3,100.00
6	$3,100.00
7	$3,100.00
8	$3,100.00
9	$3,100.00
IRR	26.11%

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