Project Y has following cash flows: C 0 = -800, C 1 = +5,000, and C 2 = -5,000....

Project Y has following cash flows: C ₀ = -800, C ₁ = +5,000, and C ₂ = -5,000. Calculate the IRRs for the project.

		25 percent and 400 percent.
		125 percent and 500 percent.
		-44 percent and 11.6 percent.
		No IRRs exist for this project.

Expert Solution

Year	Cash flow	× factor@ 25.00%	Present value
0	$ (800.00)	1.0000	$ (800.00)
1	$ 5,000.00	0.8000	$ 4,000.00
2	$ (5,000.00)	0.6400	$ (3,200.00)






			$ -
			$ -
NPV		1.4400	$ -

Year	Cash flow	× factor@ 400.00%	Present value
0	$ (800.00)	1.0000	$ (800.00)
1	$ 5,000.00	0.2000	$ 1,000.00
2	$ (5,000.00)	0.0400	$ (200.00)






			$ -
			$ -
NPV		0.2400	$ -

Answer is:

25 percent and 400 percent.

please rate.

jeff jeffy answered 3 years ago

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