What is the internal rate of return of a project

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9-1 A firm is evaluating an investment that costs $90,000 and is expected to generate annual cash flows equal to $20,000 for the next six years. If the firm's required rate of return is 10 percent, what is the net present value (NPV) of the project? What is its internal rate of return (IRR)? Should the project be purchased?

9-2 What is the internal rate of return (IRR) of a project that costs $45,000 if it is expected to generate $15,047 per year for five years?

9-5 Project K has a cost of $52,125 and its expected net cash inflows are $12,000 per year for eight years. The firm's required rate of return is 12 percent. Compute the projects:

(a) Traditional payback period (PB)

(b) Discounted payback period (DPB)

(c) Net present value (NPV)

(d) Internal rate of return (IRR)

Reference no: EM131018657

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