Blue Snow has come up with a new composite snowboard. Development will take Blue Snow four years and cost $250,000 per year, with the first of the four equal investments payable today upon acceptance of the project. Once in production the snowboard is expected to produce annual cash flows of $200,000 each year for 10 years. Blue Snow's discount rate is 5%. Show calculations.
a) What is the IRR for Blue Snow's snowboard project?
b) What is the NPV for Blue Snow's snowboard project?
