> BASICS OF CAPITAL BUDGETING NPV, IRR, finance problem?

BASICS OF CAPITAL BUDGETING NPV, IRR, finance problem?

Posted at: 2014-12-05 
Ethan, you simply are asking for too many questions to be answered here, and the drawing of some graphs which cannot be done in YA. On top of that I don't understand the garbled numbers you listed for the cash flows and therefore cannot attempt to answer it. But here is an online financial calculator to solve for the NPV and the IRR:

http://www.calculatorsoup.com/calculator...

http://www.datadynamica.com/irr.asp

You recently went to work for Allied Components Company, a supplier of auto repair parts used in the after-market with products from Daimler AG, Ford, Toyota, and other automakers. Your boss, the chief financial officer (CFO), has just handed you the estimated cash flows for two proposed projects. Project L involves adding a new item to the firm’s ignition system line; it would take some time to build up the market for this product, so the cash inflows would increase over time. Project S involves an add-on to an existing line, and its cash flows would decrease over time. Both projects have 3-year lives because Allied is planning to introduce entirely new models after 3years.Here are the projects ’ after-tax cash flows (in thousands of dollars): 02$80$20$60$50$10$70