Suppose you are offered a project with the following cash flows: Year Cash Flows 0 $ 8,900 1 -4,600 234 -3,300 -2,400 -1,700 a. What is the IRR of this offer? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % b. If the appropriate discount rate is 11 percent, should you accept this offer? O Reject Accept c. If the appropriate discount rate is 23 percent, should you accept this offer? O Accept O Reject d-1. What is the NPV of the offer if the appropriate discount rate is 11 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d-2. What is the NPV of the offer if the appropriate discount rate is 23 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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ems with IRR
Suppose you are offered a project with the following cash flows:
Year Cash Flows
0
$ 8,900
1
-4,600
2
-3,300
3
-2,400
4
-1,700
a. What is the IRR of this offer? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g., 32.16.)
IRR
%
b. If the appropriate discount rate is 11 percent, should you accept this offer?
O Reject
Accept
c. If the appropriate discount rate is 23 Sercent, should you accept this offer?
3 Percent, should you accept this offer?
O Accept
O Reject
d-1. What is the NPV of the offer if the appropriate discount rate is 11 percent? (A
negative answer should be indicated by a minus sign. Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
d-2. What is the NPV of the offer if the appropriate discount rate is 23 percent? (Do not
round intermediate calculations and round your answer to 2 decimal places, e.g.,
32.16.)
Transcribed Image Text:ems with IRR Suppose you are offered a project with the following cash flows: Year Cash Flows 0 $ 8,900 1 -4,600 2 -3,300 3 -2,400 4 -1,700 a. What is the IRR of this offer? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % b. If the appropriate discount rate is 11 percent, should you accept this offer? O Reject Accept c. If the appropriate discount rate is 23 Sercent, should you accept this offer? 3 Percent, should you accept this offer? O Accept O Reject d-1. What is the NPV of the offer if the appropriate discount rate is 11 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d-2. What is the NPV of the offer if the appropriate discount rate is 23 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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