In: Finance
(IRR calculation) Determine the IRR on the following projects:
a. An initial outlay of $11,000 resulting in a single free cash flow of $17,051 after 6 years
b. An initial outlay of $11,000 resulting in a single free cash flow of $52,527 after 14 years
c. An initial outlay of $11,000 resulting in a single free cash flow of $113,017 after 19 years
d. An initial outlay of $11,000 resulting in a single free cash flow of $13,784 after 4 years
1- | 2- | ||||
Year | cash flow | Year | cash flow | ||
0 | -11000 | 0 | -11000 | ||
1 | 0 | 1 | 0 | ||
2 | 0 | 2 | 0 | ||
3 | 0 | 3 | 0 | ||
4 | 0 | 4 | 0 | ||
5 | 0 | 5 | 0 | ||
6 | 17051 | 6 | 0 | ||
IRR = Using IRR function in MS excel | IRR(E1406:E1412) | 8% | 7 | 0 | |
8 | 0 | ||||
3- | 9 | 0 | |||
Year | cash flow | 10 | 0 | ||
0 | -11000 | 11 | 0 | ||
1 | 0 | 12 | 0 | ||
2 | 0 | 13 | 0 | ||
3 | 0 | 14 | 52527 | ||
4 | 0 | IRR = Using IRR function in MS excel | IRR(H1406:H1420) | 11.81% | |
5 | 0 | ||||
6 | 0 | 4- | |||
7 | 0 | Year | cash flow | ||
8 | 0 | 0 | -11000 | ||
9 | 0 | 1 | 0 | ||
10 | 0 | 2 | 0 | ||
11 | 0 | 3 | 0 | ||
12 | 0 | 4 | 13784 | ||
13 | 0 | IRR = Using IRR function in MS excel | IRR(H1425:H1429) | 5.80% | |
14 | 0 | ||||
15 | 0 | ||||
16 | 0 | ||||
17 | 0 | ||||
18 | 0 | ||||
19 | 113017 | ||||
IRR = Using IRR function in MS excel | IRR(E1417:E1436) | 13.04% |