In: Finance
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
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)