Instruction
SHOW ON EXCEL SPREAD SHEETS
1. Calculate the NPV of a project that has an initial investment of $600,000.00 at an IRR of 18% with inflows of $200,000.00 each year for the next five years. Will this project be acceptable or rejected and why?
2. A company wants to find what the Net Present Value of a project is: if the initial investment is $500,000.00 at an internal rate of return of 20% with potential inflows of $250,000.00; $200,000.00; $350,000.00; $300,000.00; $275,000.00 during the next five years with additional outflows or investments in years 2, 3, and 4 of $40,000.00 for each of those years. Will this project be acceptable or rejected and why?
1. Net Present Value http://en.wikipedia.org/wiki/Net_present_value (Links to an external site.)
2. Net present value additional information http://www.tvmcalcs.com/blog/comments/the_npv_function_doesnt_calculate_net_present_value/ (Links to an external site.)