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  • Question #2

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    gamers menia
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    This document presents the cash flows of two projects over 7 years and asks at what interest rate they would have the same net present value. Project 1 has positive cash flows of $2000 in years 2 and 3, $3000 in years 4 and 5, and $900 in years 6 and 7. Project 2 has cash flows of $1500 in years 1, 2, and 3, $2250 in years 4 and 5, and $0 in other years. The interest rate that equalizes their NPVs is calculated to be 46.95%.

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    This document presents the cash flows of two projects over 7 years and asks at what interest rate they would have the same net present value. Project 1 has positive cash flows of $2000 in years 2 and 3, $3000 in years 4 and 5, and $900 in years 6 and 7. Project 2 has cash flows of $1500 in years 1, 2, and 3, $2250 in years 4 and 5, and $0 in other years. The interest rate that equalizes their NPVs is calculated to be 46.95%.

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    © All Rights Reserved
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    12 views1 page

    Question #2

    Uploaded by

    gamers menia
    This document presents the cash flows of two projects over 7 years and asks at what interest rate they would have the same net present value. Project 1 has positive cash flows of $2000 in years 2 and 3, $3000 in years 4 and 5, and $900 in years 6 and 7. Project 2 has cash flows of $1500 in years 1, 2, and 3, $2250 in years 4 and 5, and $0 in other years. The interest rate that equalizes their NPVs is calculated to be 46.95%.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 1

    Question # 2

    At what interest rate the following two project have the same NPV?

    i 46.95%
    Project 1 Project 2
    0 0 0
    1 0 1500
    2 2000 1500
    3 2000 1500
    4 3000 2250
    5 3000 2250
    6 900 0
    7 900 0
    NPV= 2787.49 2998.72

    NPV1-NPV2 -211.22

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