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Unformatted text preview: 2 125000 x 1/(1.10)2=103306 3 110000 x 1/(1.10)3=82645 4 80000 x x 1/(1.10)4=54641 Total PV = 467864 NPV = 467864450000=17864 positive NPV 2. A capital budgeting project has a net present value of $10,000 and a modified internal rate of return of 13%. The project's required rate of return is 11%. The internal rate of return is IRR = 11+ (10000/10000+9823 x(1311)} = 12% therefore IRR = 12% Calculation of NPV at 13% 10000 x1.11/1.13 =9823...
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 Spring '11
 joannes

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