Thorley Inc. is considering a project that has the following cash flow data. Wha

Question

Thorley Inc. is considering a project that has the following cash flow data.  What is the project's IRR?  Note that a project's IRR can be less than the WACC or negative, in both cases it will be rejected.

Year     0          1          2          3          4          5

Cash flows -$1,075        $325    $325    $325    $325    $325

Thorley Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the WACC or negative, in both cases it will be rejected.

Explanation / Answer

-$1,075= 325/(1+irr) + 325/(1+irr)^2 + 325/(1+irr)^3 + 325/(1+irr)^4+325/(1+irr)^5

15.566%

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