Calculating NPV and IRR of cash flows
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Consider the project with the following expected cash flows:
Year Cash flow
0 - $500,000
1 $100,000
2 $110,000
3 $550,000
?If the discount rate is 0%, what is the project's net present value?
?If the discount rate is 4%, what is the project's net present value?
?If the discount rate is 8%, what is the project's net present value?
?If the discount rate is 10%, what is the project's net present value?
?What is this project's internal rate of return?
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Solution Summary
Solution describes the steps in finding out Net Present Value of given cash flows related to a project at various discount rates. It also explains the method to get IRR for these cash flows.
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Please refer attached file for better clarity of tables and complete formulas.
Solution :
Present Value = Future ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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