. Computing internal rate of return. What is the internal rate of return on the
ID: 2466057 • Letter: #
Question
. Computing internal rate of return. What is the internal rate of return on the following projects, each of which requires a $20,000 cash outlay now and returns the cash ows indicated? a. $10,426.72 at the end of Years 1 and 2. b. $3,196.40 at the end of Years 1 through 10.
c. $3,429.28 at the end of Years 1 through 13. d. $3,939.00 at the end of Years 1 through 15. e. $8,397.84 at the end of Years 3 through 7. f. $3,618.80 at the end of Years 2 through 10. g. $37,508.98 at the end of Year 5 only
Explanation / Answer
Note: IRR in each case is computed using Excel built-in IRR function [=IRR()].
(a)
(b)
(c)
(d)
NOTE: First 4 sub-questions are answered.
(a) Year Cash Flow ($) 0 -20,000 1 10,426.72 2 10,426.72 IRR = 2.83%Related Questions
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