Question

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 –$ 39,600,000
1 63,600,000
2 12,600,000

  

a-1.

What is the NPV for the project if the company requires a return of 12 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?
  • No

  • Yes

  

b.

(A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

  

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Answer #1

calculating Net Present value year o cash py factor @ 12%. flow Dis. cash flows - 39600000 - 39600000 63600000 0.89286 567857

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