# The project cash flow using net present value

The purpose of this assignment is to allow the student to calculate the project cash flow using (NPV), internal rate of return (IRR), and the payback methods.

Assignment Steps

Resources:Corporate Finance

Createa 350-word memo to management including the following:

Describe the use of internal rate of return (IRR), net present value (NPV), and the payback method in evaluating project cash flows.

Calculatethe following time value of money problems:

1 If you want to accumulate \$500,000 in 20 years, how much do you need to deposit today that pays an interest rate of 15%?

2 What is the if you plan to invest \$200,000 for 5 years and the interest rate is 5%?

3 What is the interest rate for an initial investment of \$100,000 to grow to \$300,000 in 10 years?

4 If your company purchases an annuity that will pay \$50,000/year for 10 years at a 11% discount rate, what is the value of the annuity on the purchase date if the first annuity payment is made on the date of purchase?

5 What is the rate of return required to accumulate \$400,000 if you invest \$10,000 per year for 20 years. Assume all payments are made at the end of the period.

Calculatethe project cash flow generated for Project A and the NPV method.

Which project would you select, and why?

Which project would you select under the payback method? The discount rate is 10% for both projects.

Note that a similar problem is in the textbook in Section 5.1.

Sample Template for Project A and Project B:

Showall work.

Submitthe memo and all calcluations.

Clickthe Assignment Files tab to submit your assignment.

Researching Industry Financial Statistics

MBA Finance 571

Week 3

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Researching Industry Financial Statistics

Conclusion

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