Given the following free cash flows, determine the IRR for the three independent
ID: 2660996 • Letter: G
Question
Given the following free cash flows, determine the IRR for the three independent
projects A, B, C.
PROJECT A
PROJECT B
PROJECT C
INITIAL OUTLAY
-$50,000
-$100,000
-$450,000
CASH INFLOWS:
YEAR 1
$10,000
$125,000
$200,000
YEAR 2
15,000
25,000
200,000
YEAR 3
20,000
25,000
200,000
YEAR 4
25,000
25,000
-
YEAR 5
30,000
25,000
-
PROJECT A
PROJECT B
PROJECT C
INITIAL OUTLAY
-$50,000
-$100,000
-$450,000
CASH INFLOWS:
YEAR 1
$10,000
$125,000
$200,000
YEAR 2
15,000
25,000
200,000
YEAR 3
20,000
25,000
200,000
YEAR 4
25,000
25,000
-
YEAR 5
30,000
25,000
-
Explanation / Answer
PROJECT A PROJECT B PROJECT C INITIAL OUTLAY ($50,000) ($100,000) ($450,000) YEAR 1 $10,000 $125,000 $200,000 YEAR 2 15,000 25,000 200,000 YEAR 3 20,000 25,000 200,000 YEAR 4 25,000 25,000 - YEAR 5 30,000 25,000 - IRR 23.29% 60.22% 15.89%
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