From the course: Investment Evaluation

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Challenge 5: Calculate NPV and IRR

Challenge 5: Calculate NPV and IRR - Microsoft Excel Tutorial

From the course: Investment Evaluation

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Challenge 5: Calculate NPV and IRR

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- [Instructor] Welcome to your fifth challenge in this course. In this challenge your job is to determine the IRR, and NPV, and whether Kevin should accept the project that has been presented. It should take you less than 10 minutes to complete this challenge. There are two parts to this challenge. Simple, and multiple. In the exercise file labeled 04_06_Challenge5, in the Simple tab, imagine that Kevin has a potential project in which he has to initially invest a million dollars. The project takes 10 years, and it's estimated to produce a net cash flow of $125,000 a year. The discount rate is assumed to be five percent. Calculate the IRR, and NPV of this project. Is it worth Kevin's time to take it on? Okay, now for the second part of the challenge. Let's take a look at the Multiple tab. This time I provided the net cash flows. See if you can determine the two different IRR values. It should take you less than five minutes to complete this challenge. Good luck.

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