You are evaluating a proposed project for your company. The project is expected to generate the following end-of-year cash flows:
You have been told you should evaluate this project with an interest rate of 8.00%.
A) What is the NPV?
B) what is the Internal Rate of Return (IRR)
C) Based on the information above: Your group leader has now told you that the risk of the project was understated before. As a result, she tells you to recalculate the project’s NPV with a 12.5% interest rate. What is the project’s new NPV?