Homework Answers
rate positively .
| Year | Cash flow | ||||||||
| 0 | -24 | ||||||||
| 1 | 21 | ||||||||
| 2 | 21 | ||||||||
| 3 | 21 | ||||||||
| 4 | -41 | ||||||||
| Ans a) | IRR 1 = | 8.1% | |||||||
| IRR 2 = | 27.6% | ||||||||
| And b to d | |||||||||
| Year | Cash flow | PVIF @ 6% | PVIF @ 18% | PVIF @ 36% | Present value @ 6% | Present value @ 18% | Present value @ 36% | ||
| 0 | -24 | 1 | 1 | 1 | (24.000) | (24.000) | (24.000) | ||
| 1 | 21 | 0.943396 | 0.8474576 | 0.7352941 | 19.811 | 17.797 | 15.441 | ||
| 2 | 21 | 0.889996 | 0.7181844 | 0.5406574 | 18.690 | 15.082 | 11.354 | ||
| 3 | 21 | 0.839619 | 0.6086309 | 0.3975422 | 17.632 | 12.781 | 8.348 | ||
| 4 | -41 | 0.792094 | 0.5157889 | 0.2923105 | (32.476) | (21.147) | (11.985) | ||
| (0.343) | 0.512 | (0.841) | |||||||
| Ans b . | NPV | (0.343) | |||||||
| Ans c . | NPV | 0.512 | |||||||
| Ans d . | NPV | (0.841) | |||||||
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