Question

Suppose you ar otered $,300 today but must make tha to lowing paymants: Year Cash Flows (5 7,300 -4,000 2.700 1,800 1,200 a. what is the IRR of this ofer? (Do not round intermediate calculations. Enter your answer as percent rounded to 2 decimal places, e.g, 32.16) IRR b. It the approprlate dscount rate I 10 parcent, chauld you accapt s atter? Accept Reject c. If the appropriate decount rac is 22 parcent, chauld you acccpt tis cffer? Reject d-1. what i the NPV of the offer if the ฮppropriate discount rate is 10 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations andd round your answer to 2 decimal places, e.. 32.16. NP d-2. What s the NPV o the oer it the appropriate dlscount rane is 22 parcent? (A nagathe answer should be Indicated by a minus sign. Do not round Intermedlate calculations and round your answer to 2 declmal places, e.g, 32.16.) NPV

Answer 1

1 yearcash flows v@10% @ 22% l present value at 10% rate l present value at 22% rate $7,300 $4,000 $2,700 $1,800 $1,200 15.75% IRR(B2:B6) 0.9091 0.8264 0.7513 0.6830 0.8197 0.6719 0.5507 0.4514 $7,300 -$3,636 -$2,231 -$1,352 $820 $739.75 $7,300 $3,279 $1,814 $991 S542 $674.33 4 2 4 7 IRR NPV 10 Answers: IRR Accept Reject 739.75 $674.33 15.75% 12 13 14 15 16 d-1) d-2)