Under what circumstances will net present value and internal rate of return give conflicting decision signals?

1. Under what circumstances will net present value and internal rate of return give conflicting decision signals?

2. Describe the reinvestment rate problem associated with comparing projects using the internal rate of return.

3. Problems at page 263
1) Henry can purchase a piece of land for $45,000 and lease it for a paintball range to net $4,000 a year. If Henry?s opportunity cost/discount rate is 11% and he can sell the land in seven years for %60,000 net of selling expense, is the land a good investment for henry? Use NPV.
2) Use IRR to see if Henry?s investment above is a good one.
3) If Henry has to wait 12 years to sell his land for $66,000, is it a good investment? Use both IRR and NPV.

4. What discounted cash flow approach works best when projects require different amounts of initial cash investment? Explain.

5. What discounted cash flow approach works best when investors are faced with mutually exclusive opportunities? Explain.

6. What discounted cash flow approach works best when investors are faced with mutually dependent opportunities? Explain.