Explore BrainMass

Explore BrainMass

    NPV Detailed Calculations

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please also provide detailed step by step explanation to assist in understanding future related problems.

    Your division is considering two investment projects, each of which requires an upfront expenditure of $15 million. You estimate that the investments will produce the following net cash flows:
    Year Project A Project B
    1 $5,000,000 $20,000,000
    2 10,000,000 10,000,000
    3 20,000,000 6,000,000

    a. What are the two projects' net present values, assuming the cost of capital is 5%, 10%, 15%.

    b. What are the two projects' IRRs at these same costs of capital?

    © BrainMass Inc. brainmass.com October 10, 2019, 3:24 am ad1c9bdddf


    Solution Preview


    I hope you are doing well. Please see my response attached in the Excel. I have ...

    Solution Summary

    The solution goes into a fair amount of detail to answer the question. It is clearly written and is very easy to follow along. Overall, a good response to the question being asked.