Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 1,270,000 2$ 445,000 510,000 405,000 360,000 3. 4 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 5 percent. If Anderson uses a required return of 12 percent on this project, what are the NPV and IRR of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter the IRR as a percent. Round your answers to 2 decimal places, e.g., 32.16.) NPV IRR

Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 1,270,000 2$ 445,000 510,000 405,000 360,000 3. 4 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 5 percent. If Anderson uses a required return of 12 percent on this project, what are the NPV and IRR of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter the IRR as a percent. Round your answers to 2 decimal places, e.g., 32.16.) NPV IRR

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter14: Multinational Capital Budgeting

Section: Chapter Questions

Problem 3ST

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