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What is the IRR of the following set of cash flows? Year Cash Flow 0 –$10,904...

What is the IRR of the following set of cash flows? Year Cash Flow 0 –$10,904 1 4,400 2 5,500 3 6,100 rev: 09_18_2012

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Answer #1
Project
IRR is the rate at which NPV =0
IRR 20.62%
Year 0 1 2 3
Cash flow stream -10904.000 4400.000 5500.000 6100.000
Discounting factor 1.000 1.206 1.455 1.755
Discounted cash flows project -10904.000 3647.813 3780.268 3475.919
NPV = Sum of discounted cash flows
NPV Project = 0.000
Where
Discounting factor = (1 + discount rate)^(Corresponding period in years)
Discounted Cashflow= Cash flow stream/discounting factor
IRR= 20.62%
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