NPV Profiles, Problem 15

NPV Profiles, - -$295,000 1 43,000 $15,800 $27,200 2 51,000 $13,100 $37,900 3 69,000 $12,700 $56,300 4 480,000 $9,700 $470,300 IRR 21.91 28.02

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35% 0 5 10 15 20 25 30 $350,000 -80000 -50000 0 50,000 100,000 150,000 200,000 250,000 300,000 Rate Net Present Value IRR = 21.91% NPV > 0 Good Investment NPV < 0 Bad Investment Year Cash Flow 0 -$325,000 1 43,000 2 51,000 3 69,000 4 480,000 21 22 23 24 25 26 27 28 29 -10000 -5000 0 5000 10,000 15,000 20,000 25,000 Rate NPV > 0 Good Investment NPV < 0 Bad Investment Year Cash Flow A Cash Flow B Di f erence 0 -$325,000 -$30,000
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Unformatted text preview: -$295,000 1 43,000 $15,800 $27,200 2 51,000 $13,100 $37,900 3 69,000 $12,700 $56,300 4 480,000 $9,700 $470,300 IRR 21.91% 28.02% 21.53% IRR A = 21.91% IRR B = 28.02% NPV Profle A NPV Profle B Crossover Point = 21.53% Net Present Value Profiles Chapter 8, Problem 15...
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This note was uploaded on 04/05/2011 for the course FIN 350 taught by Professor Debruinne during the Winter '11 term at Grand Valley State University.

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