Problem 10.26 Compute the IRR on the following cash flow streams: a. An initial

Question

Problem 10.26 Compute the IRR on the following cash flow streams: a. An initial investment of $17,515 followed by a single cash flow of $28,105 in year 6. (Round intermediate calculations to 4 decimal places, e.g. 1.2512 and final answer to 2 decimal places, e.g. 15.25%.) IRR % b. An initial investment of $945,880 followed by a single cash flow of $1,586,372 in year 4. (Round intermediate calculations to 4 decimal places, e.g. 1.2512 and final answer to 2 decimal places, e.g. 15.25%.) IRR % c. An initial investment of $1,957,175 followed by cash flows of $1,836,752 and $1,134,318 in years 2 and 4, respectively. (Round answer to 2 decimal places, e.g. 15.25%.)

Explanation / Answer

Hi, If you like my answer rate me first...that way only I can earn points. Thanks a) $17515 = $28105/(1+IRR)^6 So, IRR = 8.20% b) 945880 = 1586372//(1+IRR)^4 So IRR = 13.80% c) IRR = 16.77%

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