Compute the IRR of a project

Related BrainMass Solutions

• NPV versus IRR: At what interest rate would you prefer Project A to B; what is IRR?

  At what interest rates would you prefer project A to B? Hint: Try drawing the NPV profile of each project. b. What is the IRR of each project? a. At what interest rates would you prefer poject A to B?

• Capital Budgeting : NPV and IRR methods

  Compute the net present value of each project should be adopted based on the net present value approach? b. Compute the approximate internal rate of return of each project.

• Discount Rate, IRR, NPV

  a) Compute the IRR of this project. 9.19% b) Compute the NPV of this project. $5,237 c) To select a project would you use IRR or NPV? Explain.

• Capital Budgeting Questions

  To be prudent, you compute the NPV for both projects, which project should you choose? Is it consistent with the incremental IRR rule? 1. a. Compute the profitability indices for each of the three projects.

• Paypack period and choosing projects

  For project B, in a financial calculator, enter PV = -23000, PMT=6641, and N=6, then compute Interest RATE = 18.4% (alternatively, you can use EXCEL command "=RATE(6;6641;-23000)") Since IRR > cost of capital 12%, the project could be accepted.

• Calculating equity required return and weighted average cost of capital

  Alternative Compute the project's Internal Rate of Return, IRR, and determine if the project should be accepted or rejected for the HI TECH Alternative Compute the project's Internal Rate of Return, IRR, and determine if the project should be accepted

• NPV

  WACC 5% Project A WACC 10% Project B WACC 15% Project B This solution is comprised of a detailed explanation to answer the NPV and IRR of each Project.

• Net present value

  At what interest rates would you prefer project A to B? b. What is the IRR of each project? a. At what interest rates would you prefer poject A to B?

• Compare two investment projects using IRR and NPV

  IRR for project A is 34.9% IRR for project B is 31.6% B Compute the net present value for each project if the firm has a 10 percent cost of capital We use the NPV function to calculate the NPV.

• a)Assume that the projects are of average risk. What is Dilbert's optimal capital budget? Which projects should be undertaken? (b)What is the corporate cost of capital the firm should use for budgeting purposes? (c)Now suppose it was discovered that project A has been ruled out because of an environmental ruling. . How would this change your answers to questions (a) and (b)? Be specific.

  calculator or EXCEL (=RATE(5,79139,-300000)): Compute internal return rate = 10% From the list of projects, we choose the project with the highest IRR, i.e., project A, to optimize the capital budget.