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IRR Project K costs $42,881.70, its expected cash inflows are $10,000 per year for 8 years,...

IRR Project K costs $42,881.70, its expected cash inflows are $10,000 per year for 8 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places.

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Expert Solution

16.4000%
Cash flows Year Discounted CF Cumulative cash flow
         (42,881.70) 0 -42881.70 -42881.7
           10,000.00 1 8591.07 -34290.635
           10,000.00 2 7380.64                       (26,909.99)
           10,000.00 3 6340.76                       (20,569.24)
           10,000.00 4 5447.39                       (15,121.85)
           10,000.00 5 4679.88                       (10,441.97)
           10,000.00 6 4020.52                          (6,421.45)
           10,000.00 7 3454.05                          (2,967.40)
           10,000.00 8 2967.40                                    0.00

Use ITT function in Excel

IRR = 16.40%

jeff jeffy answered 4 months ago
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