Bsns 114 s2 2021 131 589 4 233 614 40 346 374 66 552

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BSNS 114 S2 2021131,589,4\$233,614,40\$346,374,66\$552,600,58\$000,000,161\$)22.1(122.0)22.1(11000,000,80\$)22.1(122.0)22.1(11000,000,72\$22.0)22.1(11000,500,23\$000,000,161\$0)IRR1(FCF0NPV73434n0ttt+++++++===Try IRR = 23%871,415,2\$708,778,37\$035,271,63\$386,534,57\$000,000,161\$)23.1(123.0)23.1(11000,000,80\$)23.1(123.0)23.1(11000,000,72\$23.0)23.1(11000,500,23\$000,000,161\$0)IRR1(FCF0NPV73434n0ttt+++++++===Try IRR = 22.7%
BSNS 114 S2 2021307,360\$355,605,38\$552,183,64\$786,850,57\$000,000,161\$)227.1(1227.0)227.1(11000,000,80\$)227.1(1227.0)227.1(11000,000,72\$227.0)227.1(11000,500,23\$000,000,161\$0)IRR1(FCF0NPV73434n0ttt+++++++===The IRR of the project is between 22 and 23 percent. Using a financial calculator, we find thatthe IRR is 22.65 percent.Bonus question (1) NPV versus IRR:Ice-cold Ice-cream Ltd has identified the following twomutually exclusive projects:YearCash flow (A)Cash flow (B)0-\$81,250-\$81,250142,50023,750233,75031,250326,25036,250421,25042,500a)What is the IRR for each of these projects? If you apply the IRR decision rule, which projectshould the company accept? Is this decision necessarily correct?b)If the required return is 10.5%, what is the NPV for each of these projects? Which project willyou choose if you apply the NPV decision rule?
B.Workings for Bonus question (1)
BSNS 114 S2 2021+44
BSNS 114 S2 2021

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Term
Fall
Professor
NoProfessor
Tags
Internal rate of return, IRRs