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# Calculating NPV and IRR for Investments

An investment requires an outflow of \$300,000 at time zero and another outflow of \$60,000 at the end of the first year. Net after-tax inflows for years 2, 3 and 4 are zero. After tax inflows in years 5, 6 and 7 are \$60,000, \$400,000 and \$400,000, respectively. The required rate of return is 17%. What is the Net Present Value of the investment?

Rupert Real Estate Company is planning to invest in a new development. The cost of the project will be \$24 million and is expected to generate cash flows of \$15,000,000, \$12,850,000, and \$5,450,000 over the next three years. The company's cost of capital is 20 percent. What is the internal rate of return on this project?

Munich Corp is looking to add a new machine at a cost of \$5,133,250. The company expects this equipment will lead to cash flows of \$918,822, \$963,275, \$947,250, \$2,017,110, \$2,212,960, and \$2,225,000 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment?

Given the following cash flows for a capital project, calculate the IRR.
Year
0 1 2 3 4 5
Cash Flows (\$60,468) \$13,749 \$13,425 \$21,549 \$9,580 \$5,958

#### Solution Summary

The solution depicts the steps to calculate NPV and IRR values in the given cases with step-by-step calculations and all formulas shown.

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