10/10 points awarded Scored What is the IRR of the following set of cash flows? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Year Cash Flow 0123 -$ 15,800 6,500 7,800 6,300 eBook IRR Print 口 References Mc Graw Hill 14.66 % Explanation Note: Intermediate answers are shown below as rounded, but the full answer was used to complete the calculation. The IRR is the interest rate that makes the NPV of the project equal to zero. So, the equation that defines the IRR for this project is: 0 = -$15,800+ $6,500 $7,800 (1+IRR) (1+IRR)² $6,300 (1+IRR)³ Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find that: IRR = 14.59% Calculator Solution: CFO C01 -$15,800 $6,500 F01 1 CO2 $7,800 F02 1 C03 $6,300 F03 1 IRR CPT 14.59% < Prev 1 of 1 Next >
10/10 points awarded Scored What is the IRR of the following set of cash flows? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Year Cash Flow 0123 -$ 15,800 6,500 7,800 6,300 eBook IRR Print 口 References Mc Graw Hill 14.66 % Explanation Note: Intermediate answers are shown below as rounded, but the full answer was used to complete the calculation. The IRR is the interest rate that makes the NPV of the project equal to zero. So, the equation that defines the IRR for this project is: 0 = -$15,800+ $6,500 $7,800 (1+IRR) (1+IRR)² $6,300 (1+IRR)³ Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find that: IRR = 14.59% Calculator Solution: CFO C01 -$15,800 $6,500 F01 1 CO2 $7,800 F02 1 C03 $6,300 F03 1 IRR CPT 14.59% < Prev 1 of 1 Next >
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
100%
Would you kindly input this problem into Excel and use the NPV function and IRR function in Excel?Thanks!
Transcribed Image Text:10/10
points awarded
Scored
What is the IRR of the following set of cash flows?
Note: Do not round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.
Year
Cash Flow
0123
-$ 15,800
6,500
7,800
6,300
eBook
IRR
Print
口
References
Mc
Graw
Hill
14.66 %
Explanation
Note: Intermediate answers are shown below as rounded, but the full answer was used
to complete the calculation.
The IRR is the interest rate that makes the NPV of the project equal to zero. So, the
equation that defines the IRR for this project is:
0
= -$15,800+
$6,500
$7,800
(1+IRR) (1+IRR)²
$6,300
(1+IRR)³
Using a spreadsheet, financial calculator, or trial and error to find the root of the equation,
we find that:
IRR = 14.59%
Calculator Solution:
CFO
C01
-$15,800
$6,500
F01
1
CO2
$7,800
F02
1
C03
$6,300
F03
1
IRR CPT
14.59%
< Prev
1 of 1
Next >
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