You are evaluating a project that costs $70,000 today. The project has an inflow

Question

You are evaluating a project that costs $70,000 today. The project has an inflow of $150,000 in one year and an outflow of $60,000 in two years.

What are the IRRs for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

What discount rate results in the maximum NPV for this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

You are evaluating a project that costs $70,000 today. The project has an inflow of $150,000 in one year and an outflow of $60,000 in two years.

Explanation / Answer

-70000+150000/(1+IRR)-60000/(1+IRR)^2=0
=>IRR=61.0702% and IRR=-46.785%

Both IRR results in zero NPV

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