Problem 5-10 Problems with IRR What is the NPV of the offer if the appropriate d
ID: 2646997 • Letter: P
Question
Problem 5-10 Problems with IRR
What is the NPV of the offer if the appropriate discount rate is 16 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))
What is the NPV of the offer if the appropriate discount rate is 23 percent? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))
Suppose you are offered $10,300 today but must make the following payments:Explanation / Answer
a. 20.45%
b. Reject
c. Accept
d. -781.42
e. 405.17
Working Note:
Year Cashflow 16% 23% 0 10300 1 10300.00 1.00 10300.00 1 -5500 0.86 -4741.38 0.81 -4471.54 2 -4200 0.74 -3121.28 0.66 -2776.13 3 -3300 0.64 -2114.17 0.54 -1773.37 4 -2000 0.55 -1104.58 0.44 -873.79 TOTAL -781.42 405.17