Question

Project L costs $42,791.88, its expected cash inflows are $9,000 per year for 9 years, and its WACC is 9%. What is the project's IRR? Round your answer to two decimal places.

Answer 1

Internal rate of return is calculated using a financial calculator by inputting the below:

• Press the CF button.
• CF0= -$42,791.88. 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 is 15.10%.

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