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FM11 21 - t he cost of capi t al appr oaches ∞ 3 2 4 1 2...

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11-19 a. The project's expected cash flows are as follows (in millions of dollars): Time Net Cash Flow 0 ($ 4.4) 1 27.7 2 (25.0) We can construct the following NPV profile: NPV (Mi l li ons of Dol l ars) Maxi mum NPV at 80. 5% Di scount Rat e (%) I RR 1 = 9.2% I RR 2 = 420% NPV approaches -$4. 0 as
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Unformatted text preview: t he cost of capi t al appr oaches ∞ 3 2- 4 1- 2 1 0- 3- 1- 4 . 4 2 0 8 0 . 5 4 2 0 Discount Rate NPV 0% ($1,700,000) 9 (29,156) 10 120,661 50 2,955,556 100 3,200,000 200 2,055,556 300 962,500 400 140,000 410 70,204 420 2,367 430 (63,581) Answers and Solutions: 11 - 21...
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