Question

Project L costs $44,581.60, its expected cash inflows are $10,000 per year for 9 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal places.

Project L costs $50,000, its expected cash inflows are $12,000 per year for 7 years, and its WACC is 10%. What is the project's payback? Round your answer to two decimal places.

Answer 1

		A	B	C	D	E	F	G	H	I	J
	Year	0	1	2	3	4	5	6	7	8	9
1	Project Costs	-44,581.60	10000	10000	10000	10000	10000	10000	10000	10000	10000
	IRR	16.95%
	IRR USING EXCEL FUNCTION	IRR(A1:J1)
		A	B	C	D	E	F	G	H
	Year	0	1	2	3	4	5	6	7
1	Project Costs	-44,581.60	10000	10000	10000	10000	10000	10000	10000
	Cumulative Cash flow	-44,581.60	-34,581.60	-24,581.60	-14,581.60	-4,581.60	5,418.40	15,418.40	25,418.40
	Payback Period = Year before cashflow turns positive + Cumulative cash flow on year 4/cash flow of year5
	Payback Period	4.46	Years

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