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Calculating the NPVs of Given Projects

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If a company is evaluating two independent projects. The company uses a 13.8 percent discount rate for such projects. Cost and cash flows are shown in the table. What are the NPVs of the two projects?

Year Project 1 Project 2
0 ($8,425,375) ($11,368,000)
1 $3,225,997 $2,112,589
2 $1,775,882 $3,787,552
3 $1,375,112 $3,125,650
4 $1,176,558 $4,115,899
5 $1,212,645 $4,556,424
6 $1,582,156
7 $1,365,882

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Solution Summary

The solution calculates the NPVs of given projects.

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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