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Deep Waters, Inc. is using the internal rate of return (IRR) when evaluating projects. Find the...

Deep Waters, Inc. is using the internal rate of return (IRR) when evaluating projects. Find the IRR for the company's project. The initial outlay for the project is $468,900. The project will produce the following after-tax inflows of

Year 1: 176,300

Year 2: 100,000

Year 3: 128,300

Year 4: 123,700

Round the answer to two decimal places in percentage form.

Solutions

Expert Solution

Particulars Year Cash flows PVF @ 5% PV @ 5% PVF @ 8% PV @8%
Cash outflow 0       (468,900)             1.00       (468,900)         1.00       (468,900)
Cash Inflow 1         176,300             0.95         167,905         0.93         163,241
Cash Inflow 2         100,000             0.91           90,703         0.86           85,734
Cash Inflow 3         128,300             0.86         110,830         0.79         101,849
Cash Inflow 4         123,700             0.82         101,768         0.74           90,923
Net Present Value           59,400             2,306         (27,154)
IRR = 5.02%

jeff jeffy answered 1 year ago
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