NPV and IRR:
Unequal Annual Net Cash Inflows
Salt River Company is evaluating a capital expenditure proposal that has the following predicted cash flows:
| Initial investment |
$(53,370) |
| Operation |
|
| Year 1 |
20,000 |
| Year 2 |
40,000 |
| Year 3 |
10,000 |
| Salvage |
0 |
(a) Using a discount rate of 12 percent, determine the net present value of the investment proposal. (Round to the nearest whole number.)
(b) Determine the proposal's internal rate of return. (Round to the nearest whole percentage.)