I'm doing a problem in which it has uneven cash flows for a few years, and using a required rate of return of 6% i discounted the future cash flows to $414,565. The initial investment requires $385,000, hence giving a NPV of $29,565 giving a IRR of 6.38%
So, if were to make this deal into a zero-NPV deal, would i simply match the the required rate of return with the IRR (of 7.42%).
So is this statement correct?:
"A NPV of zero is seen when the required rate of return matches the IRR. Therefore, an IRR of 6.38% makes the deal into a zero-npv deal."
Oops, the 7.42% should be like the other 6.38% figures
So, if were to make this deal into a zero-NPV deal, would i simply match the the required rate of return with the IRR (of 7.42%).
So is this statement correct?:
"A NPV of zero is seen when the required rate of return matches the IRR. Therefore, an IRR of 6.38% makes the deal into a zero-npv deal."
Oops, the 7.42% should be like the other 6.38% figures