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A project will produce cash inflows of $3,200 every six months for 3 years with a...

A project will produce cash inflows of $3,200 every six months for 3 years with a final cash inflow of $5,700 six months after (three and a half years from now). The project's initial cost is $36,000. What is the internal rate of return of this project?

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Answer #1

As Sum of All Cash Inflows is Lower than Initial Investment, IRR will be Negative

Therefore, Half Yearly IRR = -7.9%

Yearly IRR (APR) = -7.9*2 = -15.8%

Yearly IRR (EAR) = [(1-0.079)^2]-1 = 0.848241-1 = -0.151759 = -15.1759%

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