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5. You are thinking of making an investment in a textile mill. The CFs of the investment are below. Today -2,400 1 yr 600 2 y
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Answer #1

b. We solve IRR and NPV in below manner, formula has been shown in the next screenshot:

NPV can be solved by using 5%,10%,15%,20% substituting in the rate, and drag all the cash flows in the second line of the formula.

IRR can be solved by using all the cash flows.

Discount Rate 18% 5% $712.51 10% $343.22 15% $61.11 20% $155.86) NPV IRR 16% Year Initial Investment -2,400.00 1 600.00 2 800

=NPV(J5, 66:610) L L M 0.18 10.1 0.2 10.05 =NPV(15,66:G10) =IRR(G6:910) !=NPV(K5,66:610) 0.15 =NPV(L5, G6:G10) NPV IRR ENPV(M

a. If discount rate is 18% , and the IRR is 16% , the investment is not much of a better an investment.

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