FIN 571 Week 3 Assignment Using the Payback Method, IRR, and NPV Homework Help
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Purpose of Assignment
The purpose of this assignment is to allow the student to calculate the project cash flow
using net present value (NPV), internal rate of return (IRR), and the payback methods.
Assignment Steps
Resources: Corporate Finance
Create a 350-word memo to management including the following:
●
Describe the use of internal rate of return (IRR), net present value (NPV), and the
payback method in evaluating project cash flows.
●
Describe the advantages and disadvantages of each method.
Calculate
the following time value of money problems:
1. If you want to accumulate $500,000 in 20 years, how much do you need to
deposit today that pays an interest rate of 15%?
2. What is the future value if you plan to invest $200,000 for 5 years and the
interest rate is 5%?
3. What is the interest rate for an initial investment of $100,000 to grow to
$300,000 in 10 years?