Homework Clinic

Social Science Clinic => Business => Topic started by: mydiamond on Jun 7, 2019

Title: What is the IRR for the following net annual cash flows today -$45 000, Year 1 + $12 000, Year 2 + ...
Post by: mydiamond on Jun 7, 2019

Question 1

A company has an immediate cash outlay of -$325 000 and additional subsequent cash outlays of -$6000 per year for the life of the project. They will receive cash inflows in year 3 for + $77 000 and increasing by $3000 per year until the project ends 7 years later (total of 10 years). What is the IRR?
◦ 7.79%
◦ 9.79%
◦ 3.79%
◦ 0.79%
◦ 10.91%

Question 2

What is the IRR for the following net annual cash flows today -$45 000, Year 1 + $12 000, Year 2 + $37 000, Year 3 + $12 000, Year 4 + $17 000?
◦ 6.722%
◦ 26.722%
◦ 46.722%
◦ 16.722%
◦ 36.722%

Title: What is the IRR for the following net annual cash flows today -$45 000, Year 1 + $12 000, Year 2 + ...
Post by: lauravaras on Jun 7, 2019

Answer 1

10.91%

Answer 2

26.722%