Question

Project L costs $47,333.24, its expected cash inflows are $11,000 per year for 9 years, and its WACC is 13%. What is the project's IRR? Round your answer to two decimal places.

Answer 1

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

• Press the CF button.
• CF0= -$47,333.24. It is entered with a negative sign since it is a cash outflow.
• Cash flow for each year 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 project is 18%.

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