Calculate net present value, npv and irr, Auditing

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Problem 10.42

An investment of $83 generates after-tax cash flows of $49 in Year 1, $67 in Year 2, and $131 in Year 3. The required rate of return is 20 percent. The net present value is closest to

1. $49.81.

2. $62.18.

3. $80.17.

4. $41.62

Problem 10.40

Given the following cash flows for a capital project, calculate the NPV and IRR. The required rate of return is 8 percent.

	Year
	0	1	2	3	4	5
Cash Flows	$-49901	$12873	$12524	$23846	$12306	$5555

1. NPV=3508. IRR=11.59%

2. NPV=4511. IRR=11.59%

3. NPV=3508. IRR=13.13%

4. NPV=4511. IRR=13.13%

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