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1. Compute the NPV of a project with the following information. The IRR is 9%. The...

1. Compute the NPV of a project with the following information. The IRR is 9%. The project life is 3 years. The initial cost is $19,000. In years 1 and 2 the cash inflows are $4,500 and $5,500, respectively. Cash flow in year 3 is missing. WACC is 12%.

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Expert Solution

Hi, dear

you need to take care the understanding of IRR. IRR represents the rate of return in which the cash flow will be equal to initial investment. so by comparing we can easily calculate the npv of 3rd year using X as the 3rd year cash flow.

please hit the like button to aprreciate, and for any query feel free to comment. thank you

jeff jeffy answered 2 years ago
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