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IRR and NPV

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Duron Company is considering a project requiring $1 million initial investment.

Expected cash inflows will be:
? $25,000 in the first year
? $100,000 in the second year
? $200,000 per year for the next six years.

a. Calculate the project's IRR and the NPV assuming an 8% cost of capitol.

b. How much would each of the last six payments have to be to make the project's NPV $100,000?

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Solution Summary

This solution is comprised of questions from IRR and NPV.

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See the answer with attachment.

(a) Answer:
For NPV:
Year Cash Flow PV factor@8% PV of cash ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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