Explore BrainMass

# Internal Rate of Return, Payback Period & NPV

Not what you're looking for? Search our solutions OR ask your own Custom question.

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

An investment of \$83 generates after-tax cash flows of \$50.00 in Year 1, \$70.00 in Year 2, and \$133.00 in Year 3. The required rate of return is 20 percent. The net present value is

Mavis, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project?
Year Project

0 (\$11,368,000)

1 \$ 2,127,590

2 \$ 3,787,552

3 \$ 3,125,650

4 \$ 4,115,899

5 \$ 4,556,424

Lorne inc is getting ready to produce a new line of gold clubs by investing \$1.85 million. The investment will result in additional cash flows of \$525,000, \$817,500, and \$1,215,000 over the next three years. What is the payback period for this project?

Lower Inc. is adding to its existing buildings at a cost of \$2 million. The gallery expects to bring in additional cash flows of \$520,000, \$700,000, and \$1,000,000 over the next three years. Given a required rate of return of 10 percent, what is the NPV of this project?