Problem
A project has the following cash flows.
Year 0: -$50,000
Year 1: $20,000
Year 3: $-10,000
Year 5: $70,000
Suppose that your required return is 5%.
(Answer format: keep 2 digits after decimal point. e.g., 123.455 -> 123.46)
1) To compute the PV of cash flow at Year 5, how many times it is discounted (power of discounting)?
2) What is the NPV of the project?
3) What is the PI?
4) List the formula of IRR. In the following, which one is correct?