NETPRESENTVALUEandINTERNALRATEOFRETURN
ColinCSmith2010
11
*seegettingstarted
19&20. WhatistheNetPresentValueandIRRofthisproject?
Aprojecthasthefollowingcashflows
Year CashFlow(R)
0 ‐1,000
1‐1,700
21,500
31,800
41,900
IftheweightedaveragecostofcapitalWACCis15%
whatistheNetPresentValueofthisproject?
What is the Internal Rate of Return of the
abovecashflows?
HP10BIIfinancialcalculator
KEYS DISPLAY
*MustnotdisplayBEGIN
CLEARALL 0.00
1P/YR 1.00
1,000+/‐CFj‐1,000.00
1,700+/‐CFj‐1,700.00
1,500CFj
1,500.00
1,800CFj
1,800.00
1,900CFj
1,900.00
15I/YR 15.00
NPV 925.812
IRR/YR 31.54