# NPV,IRR & PI

May 8th, 2015
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2.Find the NPV and PI of an annuity that pays \$500 per year for eight years and costs \$2,500. Assume a discount rate of 6 percent. \$500*8)*0.94^8-2,500 (\$4,000)*0.6095-2,500 2438-2,500=-\$62.00

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Finance WorkChapter 17 Problem Questions 2,4,52.Find the NPV and PI of an annuity that pays \$500 per year for eight years and costs \$2,500. Assume a discount rate of 6 percent. \$500*8)*0.94^8-2,500 (\$4,000)*0.6095-2,5002438-2,500=-\$62.00Your NPV is -\$62.00PI: PV / Cost (\$3104.90 / \$2500) 1.24196The PI is 1.24196.4.Find the IRR and MIRR of a project if it has estimated cash flows of \$5,500 annually for seven years if its year zero's investment is \$25,000. PV of \$5,500 = initial investment = \$25,000let IRR = rPV of \$5,500 = = 25,000 solving it in we get IRR = r = 12% MIRR =

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