ncastel
Feb 23, 2008, 06:23 PM
I need help figuring out this problem.
(NPV, PI, IRR Calculations) considering two independent projects, project A and project B. The initial cash outlay associated with Project A is $50,000, and Project B is $70000. The required rate of return on both projects is 12%. The expected annual free cash flows from each project are as follows:
Year Project A Project B
0 -50000 -70000
1 12000 13000
2 12000 13000
3 12000 13000
4 12000 13000
5 12000 13000
6 12000 13000
I am to calculate the NPV and the IRR Only for each project and indicate if the project should be accepted. Can someone please help me with this problem? I don't know the formulas so it is hard for me to get a start on this. Thanks
(NPV, PI, IRR Calculations) considering two independent projects, project A and project B. The initial cash outlay associated with Project A is $50,000, and Project B is $70000. The required rate of return on both projects is 12%. The expected annual free cash flows from each project are as follows:
Year Project A Project B
0 -50000 -70000
1 12000 13000
2 12000 13000
3 12000 13000
4 12000 13000
5 12000 13000
6 12000 13000
I am to calculate the NPV and the IRR Only for each project and indicate if the project should be accepted. Can someone please help me with this problem? I don't know the formulas so it is hard for me to get a start on this. Thanks