Question
An investment costs $465 and is expected to produce cash flows of $100 at the end...
An investment costs $465 and is expected to produce cash flows of $100 at the end of each of the next 4 years, then an extra lump sum payment of $200 at the end of the fourth year. What is the expected rate of return on this investment?
Please show me how to work this problem on Excel. Thank you.
Homework Answers
Answer #1
The expected rate of return on this investment is calculated using the excel function IRR.
IRR takes the cashflows as the input.
IRR = 9.053429%
The expected rate of return on this investment is 9.053429%
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