Consider the following project:
|
Period
|
|
0
|
1
|
2
|
3
|
|
Net cash flow
|
-100
|
0
|
78.55
|
78.55
|
The internal rate of return is 20 percent. The NPV, assuming a 20 percent opportunity cost of capital, is exactly zero. Calculate the expected economic income and economic depreciation in each year.