Q4. The estimated annual after-tax cash flows of a proposed investment are shown below:

Year 1: $10,000
Year 2: $15,000
Year 3: $18,000

After-tax cash flow from sale of investment at the end of year 3 is $120,000

The initial cost of the investment is $100,000, and the required rate of return is 12%. The net present value (NPV) of the project is closest to:

A)   $19,113.

B)   $63,000.

C)   -$66,301.

Q5. Fisher, Inc., is evaluating the benefits of investing in a new industrial printer. The printer will cost $28,000 and increase after-tax cash flows by $8,000 during each of the next five years. What are the respective internal rate of return (IRR) and net present value (NPV) of the printer project if Fisher’s required rate of return is 11%?

A)   13.20%; $1,567.

B)   17.97%; $5,844.

C)   5.56%; −$3,180.

答案和详解如下：

Q4. The estimated annual after-tax cash flows of a proposed investment are shown below:

Year 1: $10,000
Year 2: $15,000
Year 3: $18,000

After-tax cash flow from sale of investment at the end of year 3 is $120,000

The initial cost of the investment is $100,000, and the required rate of return is 12%. The net present value (NPV) of the project is closest to:

A)   $19,113.

B)   $63,000.

C)   -$66,301.

Correct answer is A)

10,000 / 1.12 = 8,929

15,000 / (1.12)² = 11,958

138,000 / (1.12)³ = 98,226

NPV = 8,929 + 11,958 + 98,226 − 100,000 = $19,113

Alternatively: CFO = -100,000; CF1 = 10,000; CF2 = 15,000; CF3 = 138,000; I = 12; CPT → NPV = $19,112.

Q5. Fisher, Inc., is evaluating the benefits of investing in a new industrial printer. The printer will cost $28,000 and increase after-tax cash flows by $8,000 during each of the next five years. What are the respective internal rate of return (IRR) and net present value (NPV) of the printer project if Fisher’s required rate of return is 11%?

A)   13.20%; $1,567.

B)   17.97%; $5,844.

C)   5.56%; −$3,180.

Correct answer is A)

IRR Keystrokes: CF₀ = -$28,000; CF₁ = $8,000; F₁ = 5; CPT → IRR = 13.2%.

NPV Keystrokes: CF₀ = -$28,000; CF₁ = $8,000; F₁ = 5; I = 11; CPT → NPV = 1,567.

Since cash flows are level, an alternative is:
IRR:  N = 5; PMT = 8,000; PV = -28,000; CPT → I/Y = 13.2%.
NPV:  I/Y = 11; CPT → PV = -29,567 + 28,000 = 1,567