Attached is a problem I have for a practice quiz on cash flow and I need help. Thanks!
Cash Flow Problem:
Consider the following two projects:
Net Cash Flow Each Period
Initial Outlay
1
Project A $4,000,000 $2,003,000
Project B
$4,000,000
0
2
$2,003,000
3
$2,003,000
4
$2,003,000
0
0
$11,000,000
a. Calculate the net present value of each of the above projects, assuming a 14 percent
discount rate.
b. What is the internal rate of return for each of the above projects?