Purchase Solution

NPV, IRR and payback period

Not what you're looking for?

Ask Custom Question

Please help with the following problems.

Year Project A Project B
0 -$200 -$200
1 80 100
2 80 100
3 80 100
4 80

1. IRR/NPV. If the opportunity cost of capital is 11 percent, which of these projects is worth pursuing?
2. Mutually Exclusive Investments. Suppose that you can choose only one of these projects. Which would you choose? The discount rate is still 11%.
3. IRR/NPV. Which project would you choose if the opportunity cost of capital were 16%?
4. IRR. What are the internal rates of return on projects A and B?
7. Payback. What is the payback period of each project.

I need explanations to each of these problems so I can understand how to solve them.

Purchase this Solution
Solution Summary

This explains the steps to compute NPV, IRR and payback period. The solution is provided in Excel.

Solution Preview

Please see the attached Excel file for a detailed response.

NPV = Present value of cash ...

Purchase this Solution
Free BrainMass Quizzes
Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

View More Free Quizzes
Related BrainMass Solutions

  • Investment project: payback period, discounted, NPV, IRR.

    This assignment discusses the payback period, discounted payback period, NPV and IRR for a project.

  • NPV & Payback & IRR

    Discounted Payback period Equity case - 25 years Discounted Payback period Leveraged case - 25 years. The solution determines NPV and Payback and IRR.

  • Capital Budgeting - Payback, NPV, PI, IRR

    Discounted Cash flow (DCF) methods: NPV (Net Present Value) method IRR (Internal Rate of Return) method Profitability index A) Payback Period: Payback time or payback period is the time it will take to recoup, in the form of cash inflows from

  • NPV, IRR, MIRR, Payback Period, Discounted Payback Period

    Payback Period? Discounted Payback Period? (Show calculations) Please see attached file. Solution calculates the project's NPV, IRR, MIRR, Payback Period, Discounted Payback Period

  • Accelerate collection of cash; IRR NPV WACC IRR payback

    6 $20,000 a) What are the investment's payback period, IRR, and NPV, assuming the firm's WACC is 10%.

  • Payback, NPV, IRR

    531866 Payback, NPV, an IRR Please help with the attached Corporate Finance Question regarding Payback, NPV, and IRR. I am looking for the calculations and work shown (any formulas) on how the answer was obtained.

  • NPV and IRR of an investment

    The solution explains the calculation of NPV, IRR and payback period for an investment.

  • Capital budgeting

    The solution explains the calculation of patyback, NPV and IRR and the preparation of NPV profile

  • Discounted Payback, IRR

    + $300,000 = $ 550,000 Decision:- Select Projects A and C The solution selects projects based on Discounted Payback and IRR criteria.

  • Walker Landscaping Company end of year cash flows

    This solution is comprised of a detailed explanation to calculate the project's: a) the project's payback, b) IRR and c) NPV and answer whether the project should be undertaken.

View More Related Solutions