Ans a1) $ 8905785.12
Ans a2) Yes, Since NPV is positive
Year | Project Cash Flows (i) | DF@ 10% | DF@ 10% (ii) | PV of Project ( (i) * (ii) ) |
0 | -38400000 | 1 | 1 | (3,84,00,000.00) |
1 | 62400000 | 1/((1+10%)^1) | 0.909 | 5,67,27,272.73 |
2 | -11400000 | 1/((1+10%)^2) | 0.826 | (94,21,487.60) |
NPV | 89,05,785.12 |
Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year...
Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow 0 = –$38,000,000 1 = $62,000,000 2 = – $11,000,000 a-1. What is the NPV for the project if the company requires a return of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. Should the firm accept this project? Yes or No b. (A negative answer should be indicated by a minus...
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