Question

Consider a project with the following cash flow -100, 230 and -130 at time 0, 1...

Consider a project with the following cash flow -100, 230 and -130 at time 0, 1 and 2, respectively. Obtain the IRR(s) of the project.

A. 10% and 20%

B. 0 and 30%

C. 0 and 10%

D. IRR does not exist

E. None of the above

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Homework Answers

Answer #1

Hello Sir/ Mam

YOUR REQUIRED ANSWER IS OPTION B : 0% and 30%

Clearly, 0% is the IRR and on further calculation, it was found that 30% is also IRR.

Time Amount PVF PV
0 -$100.00 1.0000 -$100.00
1 $230.00 0.7692 $176.92
2 -$130.00 0.5917 -$76.92
NPV $0.00

Hence, IRR = 0% and 30%

I hope this solves your doubt.

Do give a thumbs up if you find this helpful.

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