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(IRR calculation​) Determine the IRR on the following​ projects: a. An initial outlay of ​$11,000 resulting...

(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

Solutions

Expert Solution

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%

jeff jeffy answered 6 months ago
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