Question

In: Finance

Blinding Light Co. has a project available with the following cash flows: 0 −$34,590 1 8,060...

Blinding Light Co. has a project available with the following cash flows:

0 −$34,590

1

 8,060
2 9,690
3 13,770
4 15,730
5 10,520

What is the project's IRR?

Multiple Choice

16.51%

18.34%

19.11%

20.38%

19.87%

Solutions

Expert Solution

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

34,590=8060/1.0x+9690/1.0x^2+13770/1.0x^3+15730/1.0x^4+10520/1.0x^5

Hence x=irr=18.34%(Approx)

jeff jeffy answered 2 years ago
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