Unformatted text preview: 100 C = , 1 200 C = and 2 75 C = . The project has two internal rates of return (-50% and +50%). For which discount rates is the project NPV positive? Answer should say something like: The discount rate must be greater (smaller) than x%) Hint: First calculate the NPV with zero discounting! Then draw a simple qualitative graph of the NPV vs. the discount rate (you know already know three points). No other calculations necessary! Please note that time zero cash flow is positive. (variation of BMA 6.5) Answer to #3: ____________________ Name: ________________ SID # : ________________ Section Number _________ Answer to #1: ____________________ Answer to #2: ____________________...
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This note was uploaded on 10/02/2009 for the course UGBA 08547 taught by Professor Odean during the Spring '09 term at Berkeley.
- Spring '09