Explore BrainMass

Explore BrainMass

    Net present value (NPV) of the project

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I am deciding among two mutually exclusive projects. The two projects have the following cash flows:

    Project X
    Year 0 -50,000
    Year 1 10,000
    Year 2 15,000
    Year 3 40,000
    Year 4 20,000

    Project Y
    Year 0 -30,000
    Year 1 6,000
    Year 2 12,000
    Year 3 18,000
    Year 4 12,000

    The company's cost of capital is 10% (WACC = 10%). What is the net present value (NPV) of the project with the highest internal rate of return (IRR)?

    © BrainMass Inc. brainmass.com June 3, 2020, 10:16 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/net-present-value-npv-project-223162

    Solution Preview

    Please see the attached file.

    Project X Project Y
    Year 0 ...

    Solution Summary

    The response describe the steps to compute the net present value (NPV) of the project.

    $2.19

    ADVERTISEMENT