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problem: Anderson International Limited is evaluating a project in Erewhon. The project will make the following cash flows:

Year

T-bill return

0

-$ 458,000

1

173,000

2

198,000

3

213,000

4

191,000

All cash flows will occur in Erewhon and are expressed in $. In an attempt to improve its economy, the Erewhonian government has confirmed that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment value for these funds is 8%. Anderson uses a 15% required return on this project.

Required:

[A] find out the NPV of the project? [Give your answer to two decimal places]

      NPV  $_________

[B] find out the IRR of the project? [Do not include the [%] sign. Give your answer to 2 decimal places]

     IRR  ______%

[C] Is the IRR you computed the MIRR of the project?

  • Yes
  • No

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M917909

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