Question

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What is the internal rate of return (IRR) of the previous project? Year Cash flow 0...

What is the internal rate of return (IRR) of the previous project?

Year

Cash flow

0

-$100,000 (it is minus!)

1

   $20,000

2

   $50,000

3

   $30,000

4

   $40,000
A.

13.98%
B.

15.98%
C.

12.98%
D.

11.98%
E.

14.98%

Solutions

Expert Solution

Year Cash flow × factor@ 13.98% Present value
0 $    (100,000.00) 1.0000 $          (100,000.00)
1 $        20,000.00 0.8773 $             17,546.94
2 $        50,000.00 0.7697 $             38,486.88
3 $        30,000.00 0.6753 $             20,259.81
4 $        40,000.00 0.5925 $             23,699.84
$                            -  
NPV 2.9149 $                      (6.54)

IRR is 13.98%

At this rate NPV is near $0

please rate.

jeff jeffy answered 1 year ago
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