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Question 3 (1 point) Find the internal rate of return (IRR) for the following series of...

Question 3 (1 point)

Find the internal rate of return (IRR) for the following series of future cash flows. The initial outlay is $564,600.

Year 1: 179,200

Year 2: 133,800

Year 3: 127,600

Year 4: 172,200

Year 5: 167,900

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

You should use Excel or financial calculator.

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Homework Answers

Answer #1

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

  • •   Press the CF button.
  • •   CF0= -$564,600. 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 project is 11.83%.

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

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