Problem 1
Two projects have the following NPVs and standard deviations:
Project A Project B
NPV 200 300
Standard deviation 75 100
Which of the two projects is more risky?
Since the two projects have different NPVs and standard deviations, the correct method to measure the riskiness is Standard deviation / NPV i.e. standard deviation per unit of NPV.
Project A = 75/200 = 0.375
Project B = 100/300 = 0.333
Since project A has higher risk per unit of return, project A is more risky.

Problem 2
2. Your firm has an opportunity to make an investment of $50,000. Its cost of capital is 12 percent. It expects aftertax ...

... There are three problems. Solutions to these problems depict the methodology to calculate NPV, IRR and incremental IRR. Please show all work for all questions. ...

... For each of the projects shown in the following table, calculate the internal ... by dis f capital is given, NPV can be calculated by discounting ...NPV Calculator. ...

... The solution calculates the NPV, IRR for projects and evaluates capital budgeting. Given the following information, calculate the NPV and IRR and give your ...

... We will calculate Present Value of Each Cash flow for ... We find that first negative NPV at 9%. So ...Calculating IRR requires lot of tedious calculations and time ...

... Step by step method is demonstrated to calculate NPV, PI, IRR or Payback period. ... IRR is the discount rate at which NPV is 0 IRR can be found by using ...

...Calculate the NPV, the IRR... It generates a healthy net present value meaning that the present value of the future cash flows discounted at 15% exceeds the ...

... b. NPV is calculated as PV of cash inflows ... We can calculate the IRR using the IRR function ... The solution explains how to calculate the Payback, Net Present Value...

Calculating NPV and IRR for the given project. Janes, Inc. ... (b) Calculate the IRR for this project. ... Solution calculates NPV and IRR in the given case. Solution. ...

Calculating NPV and IRR for Investments. ... discount rate is 15 percent, what is the NPV of this ... the following cash flows for a capital project, calculate the IRR. ...