Net Present Value and IRR problems


Period 0 1 2 3 4 5 6 7
Project
A Investment $(65,000)
Cash Flows $15,000 $19,000 $14,000 $25,000 $10,000 $9,000 $15,000

B Investment $(1,000)
Cash Flows $90 $275 $650 $500 $250 $300 $50



1 For "A" above, calculate the Net Present Value using a 15% discount rate.

2 For "B" above, calculate the Net Present Value using a 12% discount rate.

3 For "A" above, calculate the Internal Rate of Return.

4 For "b" above, calculate the Internal Rate of Return.

a.
NPV = 65,411.04
IRR = 15.22%
B.
NPV= 1,396.47
IRR = 23.36%