What is the project's internal rate of return and the NPV on the following discount rates?
0%
4%
8%
12%

If I hand plotted a chart where the discount rate is on the x axis and the net present value on the y axis and plotted the NPV of the project as a function of the discount rate by dots for the 4 discount rates the curve will intersect the horizontal line at a particular discount rate. What is the discount rate at which the graph intersects the horizontal axis?

Solution Preview

Project's IRR can be calculated through Excel. Remember the manual way to get IRR is very tedious and is a trial and error process. However, Excel is very good at calculating IRR quickly.

To get ...

Solution Summary

The solution answers the question below in great detail.

Which of the following is the approximate internalrate of return for an investment that costs $45,880 and provides a $4,000 annuity for 20 years?
a. 11%
b. 6%
c. 8%
d. 10%

When the net present value is positive:
a) the internalrate of return equals the cost of capital
b) the internalrate of return exceeds the cost of capital
c) the internalrate of return is less than the cost of capital
d) the internalrate of return equals zero

I don't understand this problem at all.
Practice 18-16 Ranking by the InternalRate of Return Method
The company is considering eight capital investment projects. The company has a minimum required internalrate of return of 13%. Screen and rank the eight capital investment projects using the internalrate of return.
P

A company has estimated that a proposed $10,000 investment will generate $3,250 for each of the next four years. Their required rate of return is 9%. Using internalrate of return as a decision criterion, determine whether or not this proposal should be accepted.

Please help with the following problem.
Briefly describe the following three key valuation methodologies that companies use - Net Present Value (NPV), InternalRate of Return (IRR), and Modified InternalRate of Return (MIRR).
Please site any sources and provide references.

An investment of $50,000 resulted in uniform income of $10,000 per year for 10 years and a single amount of $5,000 in year 5. The rate of return on the investment was closest to?
A. 10.6% PER YEAR
B. 14.2% PER YEAR
C. 16.4% PER YEAR
D. 18.6% PER YEAR

Please see attached file for further detail.
Question 2 - Net Present Value
You have just paid $20 million in the secondary market for the winning Powerball lottery ticket. The prize is $2 million at the end of each year for the next 25 years. If your required rate of return is 8 percent, what is the net present value (N

Consider a project with the following expected cash flows:
Year Cash flow
0 - $400,000
1 $100,000
2 $120,000
3 $850,000
If the discount rate is 0%, what is the project's net present value?
If the discount

Nina Roberts has the opportunity to invest in a timber forest. She would have to invest $100,000.
Revenues of $20,000 per year are projected for 20 years. However, these revenues will not begin coming in for five years because the timber must be seasoned before cutting and selling can begin. Ms. Roberts's hurdle rate is 10%. Ig

The following data pertains to an investment proposal:
Required investment $400,000
Annual cost savings $105,700
Projected life of investment 6 years
Projected salvage value $0
Required rate of return 12%
Ignoring income taxes, the internalrate of return on this investment is closest to: