Find the NPV and PI of an annuity Custom Essay

1.  Find the NPV and PI of an annuity that pays $500 per year for eight years and costs $2500.  Assume a discount rate of 6 percent.

2.  Find the IRR and MIRR of a project if it has estimated cash flows of $5500 annually for seven years if its year zero investment is $25000 and the firms mnimum required rate of return on the project is 19 percent.

3.  For the following projects, compute NPV, IRR, MIRR, profitablility index, and payback.  If these projects are mutually exclusive, which ones should be done? If they are independent, which ones should be undertaken?

 

A                   B                C                 D

year 0      -1000             -1500         -500             -2000

year 1         400               500           100                600

year 2         400               500            500               800

year 3         400               700            250               200

year 4         400               200            200               300

Discount rate 10%            12%           15%              8%

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