What is the NPV, IRR, and modified internal rate of return associated with each of the two jet planes?

Dinsmore international manages singers

Given that these jet planes are investments, it is possible to calculate their net present value and internal rate-of-return (IRR) as well as modified internal rates of return (MIRR).

Net Present Value: This is the net value of an investment. It’s calculated by subtracting its initial cost from all cash flows, discounted at a certain discount rate.
For Plane A: NPV = -$15,000 + ($10,000 x 0.9) + ($10,000 x 0.82) + ($10,000 x 0.74) = $2,268
For Plane B: NPV = -$12,500 + ($10,000 x 0.87) + ($10,000 x 0.75) + ($10,000 x 0.65)= $1125
The Internal Rate of Return is the rate at which the NPV becomes equal to zero. It would be 23% in Plane A and 25% in Plane B.
Modified Internal Ratio of Return: This is a modified formula for IRR. It takes into account both cash outflows and future cash flows. It would be 17% in Plane A, and 19% in Plane B.

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