A project has an initial cost of 400,000 and is estimated to produce cash flows of X at the end of each year for 10 years. If the internal rate of...

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Q1. A project has an initial cost of $400,000 and is estimated to produce cash flows of $X at the end of each year for 10 years. If the internal rate of return for the project is 18.7% p.a. effective, calculate X (to the nearest dollar)

Q2. Two projects have the same initial cost. Project A has estimated cash flows of $1000,2000,3000,4000 at the end of years 1 to 4 respectively. Project B has estimated cash flows of $4000,3000,2000,1000 at the end of years 1 to 4 respectively. Which project will have the greater NPV assuming a positive discount rate?

A. The NPV will be the same for bothe Project A and B

B. Project B

C. Project A

D. Can't determine from.the information given

Question

A project has an initial cost of 400,000 and is estimated to produce cash flows of X at the end of each year for 10 years. If the internal rate of...

  • Written in: 17-Oct-2019
  • Paper ID: 5935192
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DATE ANSWERED

Oct 17, 2019

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