What are the NPV and IRR of the project

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Reference no: EM132210984

Problem - NPV and IRR

Butler International Limited is evaluating a project in Erewhon. The project will create the following cash flows:

Year	Cash Flow
0	$1,310,000
1	485,000
2	550,000
3	445,000
4	400,000

All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are blocked and must be reinvested with the government for one year. The reinvestment rate for these funds is 3 percent.

If the company uses a required return of 13 percent on this project, what are the NPV and IRR of the project?

Reference no: EM132210984

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