Question

In: Finance

Project L costs $53,716.57, its expected cash inflows are $11,000 per year for 11 years, and...

Project L costs $53,716.57, its expected cash inflows are $11,000 per year for 11 years, and its WACC is 11%. What is the project's IRR? Round your answer to two decimal places.

___%

Solutions

Expert Solution

IRR(internal rate of return) is the rate at which NPV(net present Value )= 0

here the Initial outflow is given as $53,716.57 Inflows are $11,000 per year WACC is given as 11%

IRR can be computed by using Excel function or by using the trial and error and interpolation method(the value would be approximately the same) .Since The excel function is more accurate ,the calculation has been done using that.

IRR using excel function =16.75%


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