Cutler Petroleum, Inc., is trying to evaluate a generation project with the following cash flows Year Cash Flow 0 –$ 38,500,000 1 62,500,000 2 – 11,500,000 a-1 What...

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Finance

Cutler Petroleum, Inc., is trying to evaluate a generationproject with the following cash flows
Year Cash Flow
0 –$ 38,500,000
1 62,500,000
2 – 11,500,000

a-1
What is the NPV for the project if the company requires a returnof 12 percent? (Do not round intermediate calculations andround your answer to 2 decimal places, e.g., 32.16.)

  NPV $

a-2 Should the firmaccept this project?
No
Yes

b.
This project has two IRRs, namely percent and percent, in orderfrom smallest to largest. (Note: If you can only compute one IRRvalue, you should input that amount into both answer boxes in orderto obtain some credit.) (A negative answer should beindicated by a minus sign. Do not round intermediate calculationsand enter your answers as a percent rounded to 2 decimal places,e.g., 32.16.)

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3.8 Ratings (581 Votes)

Answer a1WorkingAnswer a2YesProject should be accepted as NPV is positiveAnswer bThis See Answer

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Cutler Petroleum, Inc., is trying to evaluate a generationproject with the following cash flowsYearCash Flow0–$38,500,000162,500,0002–11,500,000 a-1What is the NPV for the project if the company requires a returnof 12 percent? (Do not round intermediate calculations andround your answer to 2 decimal places, e.g., 32.16.) NPV$ a-2Should the firmaccept this project?NoYes b.This project has two IRRs, namely percent and percent, in orderfrom smallest to largest. (Note: If you can only compute one IRRvalue, you should input that amount into both answer boxes in orderto obtain some credit.) (A negative answer should beindicated by a minus sign. Do not round intermediate calculationsand enter your answers as a percent rounded to 2 decimal places,e.g., 32.16.)