Answer:
NPV = $-8,691,698.65
NO
IRR = 0%
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
IRR and IRR can be calculated with a financial calculator
Cash flow in year 0 = $-100 million
Cash flow each year from year 1 to 19 = $15 million
Cash flow in year 20 = $15 million - $200 million = $-185 million
I = 12%
NPV = $-8,691,698.65
IRR = 0%
IRR is not reliable for a project with a cash flow with irregular cash flows.
Cash flow is irregular when there is a more than cash outflow
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.