Compute npv of the project? determine irr of the, Ask an Expert

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Q1) Anderson International Limited is estimating project in Erewhon. Project will create following cash flows:

Year	Cash Flow
0	-$458,000
1	173,000
2	198,000
3	213,000
4	191,000

All cash flows will happen in Erewhon and are expressed in dollars. In attempt to improve its economy, Erewhon government has decided that all cash flows created by foreign company are "blocked" and should be reinvested with government for one year. Reinvestment rate for these is 8 percent. Anderson utilizes 15 percent required return on this project.

Required:

(a) Compute NPV of the project?

(b) Determine IRR of the project?

A. Yes
B. No

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M919486

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