Howell Petroleum, Inc., is trying to evaluate a generation project with the foll

Question

Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:

Year Cash Flow

0 –$43,000,000

1 67,500,000

2 –18,000,000

If the company requires a 11 percent return on its investments, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

NPV=_________

Compute the IRRs for this project. (Do not round intermediate calculations. Enter the positive value in the first answer box, and the negative value in the second answer box. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Internal rate of return % __________

Internal rate of return % __________

If the company requires a 11 percent return on its investments, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

NPV=_________

Compute the IRRs for this project. (Do not round intermediate calculations. Enter the positive value in the first answer box, and the negative value in the second answer box. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Internal rate of return % __________

Internal rate of return % __________

Explanation / Answer

Dec-15 Dec-16 Dec-17 Cash flows -43000000 67500000 -18000000 Discount Rate % 11% Free Cash Flow -43000000 60810811 -14609204 NPV 3201607 IRR 0.106982

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