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Find the internal rate of return​ (IRR) for the following project. The project requires an initial...

Find the internal rate of return​ (IRR) for the following project. The project requires an initial investment of $ 11 comma 000 and provides 5 annual cash inflows of $ 29 comma 200 . Assume a cost of capital of 7.8 % .

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Answer #1

Internal rate of return can be calculated using a financial calculator by inputting the below:

  • Press the CF button.
  • CF0= -$11,000. The initial cash flow is indicated by a negative sign since it is a cash outflow.  
  • Cash flow for each of the fifteen years should be entered.
  • Press Enter and down arrow after inputting each cash flow.
  • After entering the last cash flow cash flow, press the IRR and CPT button to get the IRR of the project.

The IRR of the project is 295.05%.

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