USLUHOPO Do Yuan opens a lab. The lab has an initial cost of $100.000 Expected net...

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Answer 1

Answer #1

	Ans: The NPV is $26,479, the IRR is 16.7% Dr Yuann
	NPV= PV of Inflows - PV of Outflows

	PV of Outlows= $ 100000 * 1	100000

	PV of Inflows:
Year	Inflows	PVF @ 8 %	PVAF
1	$ 24,000.00	0.9259	$ 22,221.60
2	$ 27,600.00	0.85733	$ 23,662.31
3	$ 31,740.00	0.79383	$ 25,196.16
4	$ 36,501.00	0.73503	$ 26,829.33
5	$ 41,976.15	0.68058	$ 28,568.13
6	$ 48,272.57	0.63017	$ 30,419.93
	Total		$ 156,897.46

	NPV
	($ 126479 - $ 100000)	$ 26,479.00

	IRR= That rate where PV of Inflows - PV of Autflows

	PV of Inflows:
Year	Inflows	PVF @ 8 %	PVAF	PVF @ 16 %	PVAF
1	$ 24,000.00	0.9259	$ 22,221.60	0.8621	$ 20,690.40
2	$ 27,600.00	0.85733	$ 23,662.31	0.7432	$ 20,512.32
3	$ 31,740.00	0.79383	$ 25,196.16	0.64066	$ 20,334.55
4	$ 36,501.00	0.73503	$ 26,829.33	0.55229	$ 20,159.14
5	$ 41,976.15	0.68058	$ 28,568.13	0.47611	$ 19,985.26
6	$ 48,272.57	0.63017	$ 30,419.93	0.41044	$ 19,812.99
	Total		$ 156,897.46		$ 121,494.66

	IRR = 16. 7 %

Option E is correct

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Answer 2

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