a. Calculate the net present value of the following project for discount rates o

Question

a. Calculate the net present value of the following project for discount rates of 0, 50, and 100%: (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.) C0 C1 C2 ?$7,590.00 +$4,830.00 +$20,700.00 -------------------------------------------------------------------------------- Discount Rate NPV 0% $ 50% 100% -------------------------------------------------------------------------------- b. What is the IRR of the project? IRR %

Explanation / Answer

Hi, Please find the calculations as follows: NPV @ 0 = - 7590 + +4830/(1+.0)^1 + 20700/(1+.0)^2 = 17940 NPV @ 50% = -7590 +4830/(1+.50) + 20700/(1+.50)^2 = 4830 NPV @ 100% = -7590 +4830/(1+1)^1+ 20700/(1+1)^2 =0 Part B IRR = 100% (where NPV is 0) Thanks, Aman

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