Project Management Question of the Week

Use the table to answer the following:

End of Year	Inflows	Outflows
0	$0	$100
1	50	40
2	100	20
3	120	20

What will be the project net present value if the discount rate is 12% annually?

• $43.88
• $90.00
• $190.00
• $270.45

Really easy - - sum the inflows/outflows, you know the PV has to less than the summation.  Only one.

Bsed on the information from the above question, what is the project's internal rate of return?

• 5.7%
• 10.8%
• 12.0%
• 30.3%

Same methodology as from above.  Yon end up with a positive summation at 12%.  You know it has to be greater than 12%,  Only one.