Calculation of npv and mirr on a projectnet present

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Calculation of NPV and MIRR on a project.

Net Present Value

1.You have just paid $20 million in the secondary market for the winning Powerball lottery ticket. The prize is $2 million at the end of the year for the next 25 years. If your required rate of return is 8 percent, what is the net present value (NPV) of the deal?

Modified Internal Rate of Return

2. What is the modified internal rate of return (MIRR) of the Powerball deal in Question 1?

Calculate NPV

Your Firm's cost of capital is 10%.  What is the Net Present Value of each investment proposal described in 1 above?  Using the Net Present Value Method as the selection criteria, which project would you select?

Reference no: EM13356090

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