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Lowell Flooring has assigned a discount rate of 15.2 percent to a new project that has...

Lowell Flooring has assigned a discount rate of 15.2 percent to a new project that has an initial cost of $285,400 and cash flows of $87,400, $98,300, and $131,700 for Years 1 to 3, respectively. What is the IRR of this project?

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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= -$285,400.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 the project C is 5.13%.

In case of any query, kindly comment on the solution.

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