What impact will each of the following have on an investment\'s net present valu

Question

What impact will each of the following have on an investment's net present value? A. An increase in interest rates B. An increase in current asset required as part of making the investment. C. An increase in the estimated price at which the equipment may be sold. D. An increase in investors' required return on equity. For the problem below, used both tables and Excel. Problem #1. You purchase machinery for 23,958.00 that generates cash flow of $6000 each year for the next five years. What's the internal rate of return on this investment?

Explanation / Answer

-1.73978

8% 0 1 -23958 -23958 1 0.925926 6000 5555.556 2 0.857339 6000 5144.033 3 0.793832 6000 4762.993 4 0.73503 6000 4410.179 5 0.680583 6000 4083.499 IRR 8.00%

-1.73978

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