Question

In: Finance

Day Interiors is considering a project with the following cash flows. What is the IRR of...

Day Interiors is considering a project with the following cash flows.

What is the IRR of this project?

Year Cash Flow

0 -$100,400

1 35,900

2 50,800

3 45,000

Solutions

Expert Solution

Let irr be x%
At irr,present value of inflows=present value of outflows.

100400=35900/1.0x+50800/1.0x^2+45000/1.0x^3

Hence x=irr=14.32%(Approx)


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