Question - NPV and IRR: Unequal Annual Net Cash Inflows
Assume that Goodrich Petroleum Corporation is evaluating a capital expenditure proposal that has the following predicted cash flows:
Initial Investment ($82,850)
Operation
Year 1 30,000
Year 2 50,000
Year 3 40,000
Salvage 0
Required:
a. Using a discount rate of 12 percent, determine the net present value of the investment proposal.
b. Determine the proposal's internal rate return.