Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
41 views2 pages

Net Present Value

The document contains two examples of net present value (NPV) and internal rate of return (IRR) calculations for potential projects. The first project has a positive NPV at a 25% interest rate, so it is acceptable. The second project has an IRR of 19% which exceeds the cost of capital of 15%, so that project is also acceptable. Both examples use the NPV and IRR metrics to evaluate projects and determine if they should be accepted for investment.

Uploaded by

Harish Yadav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
41 views2 pages

Net Present Value

The document contains two examples of net present value (NPV) and internal rate of return (IRR) calculations for potential projects. The first project has a positive NPV at a 25% interest rate, so it is acceptable. The second project has an IRR of 19% which exceeds the cost of capital of 15%, so that project is also acceptable. Both examples use the NPV and IRR metrics to evaluate projects and determine if they should be accepted for investment.

Uploaded by

Harish Yadav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Year Cash Flow Interest Rate 25%

0 -$12,000.00
1 $4,200.00
2 $4,200.00
3 $4,200.00
4 $4,200.00
5 $4,200.00
6 $4,200.00
7 $4,200.00

Net Present Value $1,276.78

NPV is positive so we can accept the project.

Year Cash Flow


0 -$300,000.00
1 $60,000.00
2 $60,000.00
3 $60,000.00
4 $60,000.00
5 $60,000.00
6 $60,000.00
7 $60,000.00
8 $60,000.00
9 $60,000.00
10 $60,000.00
11 $60,000.00
12 $60,000.00
13 $60,000.00
14 $60,000.00
15 $60,000.00
16 $60,000.00
17 $60,000.00
18 $60,000.00
19 $60,000.00
20 $60,000.00

IRR 19%

Since,IRR is 19% and Cost of Capital is 15%


So,we can accept the investment.

You might also like