Consider the investment project cash flows given below n CF 0 -220000 1 94000 2 144000...

Consider the investment project cash flows given below

n	CF
0	-220000
1	94000
2	144000
3	72000

a) Find the IRR for this investment.

b) Plot the present worth of the cash flow as a function of the interest rate, i.e., consider interest rates of 5%,10%,15%,…, 30%. Identify the interest rate at which the present worth is zero.

c) Assuming a MARR of 15%, is this investment acceptable?

Solutions

Expert Solution

IRR is the rate at which the present value of all future cash inflows is equal to the present value of all cash outflows.

ekkarill92 answered 1 year ago

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