Maxwell Feed & Seed is considering a project that has the
following cash flow data. What is the project's IRR? Note that a
project's projected IRR can be less than the WACC (and even
negative), in which case it will be rejected.
Year  0  1  2  3  4  5 
Cash flows  $6,750  $2,000  $2,025  $2,050  $2,075  $2,100 









Year  Cash flows 
0  6750 
1  2000 
2  2025 
3  2050 
4  2,075 
5  2100 
Method 1: IRR Calculation using ba ii plus calculator
Input the following values in a ba ii plus calculator
CF0 = 6750
C01 = 2000, F01 = 1
C02 = 2025, F02 = 1
C03 = 2050, F03 = 1
C04 = 2075, F04 = 1
C05 = 2100, F05 = 1
IRR > CPT [Press IRR and then press CPT]
we get, IRR = 15.6104758
IRR = 15.61%
Method 2: IRR calculation using Excel
We can calculate the IRR of a project using the IRR function in Excel as shown below:
=IRR(B2:B7) = 15.61%
IRR = 15.61%
Answer > 15.61% (Option a)
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