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NPV & IRR: Find the NPV (assume 8% just to calculate NPV initially) & IRR of...

NPV & IRR:

Find the NPV (assume 8% just to calculate NPV initially) & IRR of these projects. When would you choose one over the other (i.e. what is the crossover rate)? Draw the NPV profile using 11 intervals of interest rates ranging from (and including) 0% to 100%. Place all data, ratios, calculations, findings, etc. in the first Excel sheet with references to the information in other sheets.

Time

A CF

B CF

0

-10000

-10000

1

12000

9000

2

6000

7000

3

12000

5000

4

-6000

3000

Solutions

Expert Solution

NPV A B
0% 14000.00 14000.00
10% 10785.47 9772.56
20% 8217.59 6701.39
30% 6142.29 4391.30
40% 4443.98 2603.08
50% 3037.04 1185.19
60% 1857.91 37.84
70% 859.07 -906.84
80% 4.57 -1696.39
90% -733.04 -2364.93
100% -1375.00 -2937.50
IRR 80.06% 60.37%

jeff jeffy answered 1 year ago
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