Based on the information given in the table, what is this project's internal rate of return?...

Based on the information given in the table, what is this project's internal rate of return?

Time	Cash-Flow
0	($30)
1	$5
2	$7
3	$2
4	$6
5	$6
6	$12

WACC = 5.25%

6.35%

4.71%

6.30%

6.25%

5.25%

Expert Solution

Ans 6.30%

Year	Project Cash Flows (i)		DF@ 5% (ii)	PV of Project A ( (i) * (ii) )	DF@ 10% (iii)	PV of Project A ( (ii) * (iii) )
0	-30		1	(30.00)	1	(30.00)
1	5		0.952	4.76	0.909	4.55
2	7		0.907	6.35	0.826	5.79
3	2		0.864	1.73	0.751	1.50
4	6		0.823	4.94	0.683	4.10
5	6		0.784	4.70	0.621	3.73
6	12		0.746	8.95	0.564	6.77
		TOTAL CASH INFLOW		1.43	NPV	(3.57)



	IRR =	Ra + NPVa / (NPVa - NPVb) * (Rb - Ra)
		5% + 1.43 / (1.43 + 3.57)*5%
		6.30%

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