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What is the approximate IRR for a project that costs $100,000 and provides cash inflows of...

What is the approximate IRR for a project that costs $100,000 and provides cash inflows of $30,000 for 6 years? Please show the steps on a financial calculator!

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Answer #1

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

  • Press the CF button.
  • CF0= -$100,000. 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 button and CPT keys to get the IRR of the project.

The IRR is 19.91%.

Therefore, the IRR of the project is 19.91%.

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