Question

Thorley Inc. 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 or negative, in both cases it will be rejected. Excel version please!

Year	0	1	2	3	4	5
Cash flows	-$1,100	$325	$325	$325	$325	$325

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	a.	14.59%
	b.	15.18%
	c.	11.24%
	d.	16.20%
	e.	13.43%

Answer 1

IRR is the rate at which NPV =0 Initial Outflow =(1,100) Year 1 =$325 Year 2 =$325 Year 3 =$325 Year 4=$325 Year 5 =$325

IRR using Excel Function =14.59%(a)