Discounted Cash Flow: Year (n) 0 1 2 3 4 Undiscounted cash flow -$600,000 $200,000 $200,000...

Discounted Cash Flow:

Year (n)	0	1	2	3	4
Undiscounted cash flow	-$600,000	$200,000	$200,000	$200,000	$200,000
DCF @ 11%
∑DCF @11%
DCF @ 13%
∑DCF @13%
DCF @ 15%
∑DCF @15%

Notes:

DCF = Discounted Cash Flow
∑DCF = Cumulative Discounted Cash Flow
Refer to the following video on how to calculate IRR with Excel.

Provide your completed spreadsheet in the space below. Alternatively, do the exercise in Excel and enter the values back into the table above.

a) What are the NPVs for 11%, 13% and 15% respectively?

b) Based on your results above; what is the approximate IRR (and why)?

c) Calculate the exact IRR with Excel (to 1 decimal place).

Expert Solution

The relevant answers have been underlined and highlighted in the respective boxes.

ekkarill92 answered 2 years ago

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