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# A Project's NPV and IRR

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A company just paid \$10 million for a feasibility study. If the company goes ahead with the project, it must immediately spend another \$100 million now, and then spend \$20 million in one year. In two years it will receive \$80 million, and in three years it will receive \$90 million. If the cost of capital for the project is 11 percent, what are the project's NPV and IRR?

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A company just paid \$10 million for a feasibility study. If the company goes ahead with the project, it must immediately spend another \$100 million now, and then spend \$20 million in one year. In two years it will receive \$80 million, and in three years it will receive \$90 million. If the cost of capital for the project is 11 percent, what are the project's NPV and IRR?
Year 0 1 2 3
I. Investment Outlay
1. Feasibility study -10,000,000
2. ...

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This solution is comprised of a detailed explanation to answer the project's NPV and IRR.

\$2.49