Question

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

Year	Cash Flow
0	−$32,830
1	8,390
2	10,130
3	14,540
4	16,170
5	11,180

What is the project's IRR?

Multiple Choice

• 23.32%

• 24.25%

• 20.15%

• 24.87%

• 22.39%

Answer 1

Internal rate of return can be calculated using a financial calculator by inputting the below:

• Press the CF button.
• CF0= -$32,830. The initial cash flow is indicated by a negative sign since it is a cash outflow.  
• Cash flow for each of the fifteen years should be entered.
• Press Enter and down arrow after inputting each cash flow.
• After entering the last cash flow cash flow, press the IRR and CPT button to get the IRR of the project.

The IRR of the project is 22.39%.

Hence, the answer is option e.