Matchroom's investment appraisal committee have worked out the Net Cash flows in the working shown below. Additional details of the project are also given below. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Net Cashflows - 114,285.71 25,528.57 27,795.21 30,257.55 32,932.34 39,694.93 Additional Information · The cost of the machine is £ 115,000 with a residual value of £3,857 · Matchroom prefer the straight-line method as a method of depreciation For capital investment projects ABC Ltd uses a discount rate of 10% and 20% for their IRR calculations. Calculate the IRR (Internal Rate of Return) of the new machine (using the 10% and 20% discount rates provided). Make use of the template provided above and do not round off your calculations until the final answer. NPVA= number is a negative value, include the minus sign e.g. -100000 | Round off your answer to the nearest whole number with no £ sign. If the NPVB= Round off your answer to the nearest whole number with no £ sign. If the number is a negative value, include the minus sign e.g. -100000 IRR= % Round off your answer to the nearest whole number with no % sign
Matchroom's investment appraisal committee have worked out the Net Cash flows in the working shown below. Additional details of the project are also given below. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Net Cashflows - 114,285.71 25,528.57 27,795.21 30,257.55 32,932.34 39,694.93 Additional Information · The cost of the machine is £ 115,000 with a residual value of £3,857 · Matchroom prefer the straight-line method as a method of depreciation For capital investment projects ABC Ltd uses a discount rate of 10% and 20% for their IRR calculations. Calculate the IRR (Internal Rate of Return) of the new machine (using the 10% and 20% discount rates provided). Make use of the template provided above and do not round off your calculations until the final answer. NPVA= number is a negative value, include the minus sign e.g. -100000 | Round off your answer to the nearest whole number with no £ sign. If the NPVB= Round off your answer to the nearest whole number with no £ sign. If the number is a negative value, include the minus sign e.g. -100000 IRR= % Round off your answer to the nearest whole number with no % sign
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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