Fin – the drillago co. is involved in searching for locations

The Drillago Co. is involved in searching for locations in which to drill for oil. The firm’s current project requires an initial investment of $15 million and has an estimated life of 10 years. the expected future cash inflows for the project are as shown.               
Year 1 Cash inflows $600,000     
year 2 cash inflows 1,000,000               
year 3 cash inflows 1,000,000               
year 4 cash inflows 2,000,000               
year 5 cash inflows 3,000,000               
year 6 cash inflows 3,500,000               
year 7 cash inflows 4,000,000               
year 8 cash inflows 6,000,000               
year 9 cash inflows 8,000,000               
year 10 cash inflows 12,000,000               
The firm’s current cost of capital is 13%.               
TO DO:               
Create a spreadsheet to answer the following:               
A.Calculate the project’s internal rate of return (NPV). Is the project acceptable under the IRR technique? Explain.               
B.Calculate the project’s internal rate of return (IRR). Is the project acceptable under the IRR technique? Explain.               
C. In this case, did the two methods produce the same results? Generally, is there a preference between the NPV and IRR techniques? Explain.               
d. Calculate the payback period for the project. If the firm usually accepts projects that have payback periods between 1 and 7 years, is this project acceptable?               

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more