11-13. (Calculating IRR, payback, and a missing cash flow) The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing facil- ity. The project is expected to provide a series of positive cash flows for each of the next four years. The estimated cash flows associated with this project are as follows: Year Project Cash Flow 0 ? 1 $800,000 2 400,000 3 300,000 4 500,000 If you know that the project has a regular payback period of 2.5 years, what is the project's IRR?

Principles of Accounting Volume 2
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Chapter11: Capital Budgeting Decisions
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11-13. (Calculating IRR, payback, and a missing cash flow) The Merriweather Printing
Company is trying to decide on the merits of constructing a new publishing facil-
ity. The project is expected to provide a series of positive cash flows for each of
the next four years. The estimated cash flows associated with this project are as
follows:
Year
Project Cash Flow
0
?
1
$800,000
2
400,000
3
300,000
4
500,000
If you know that the project has a regular payback period of 2.5 years, what is the
project's IRR?
Transcribed Image Text:11-13. (Calculating IRR, payback, and a missing cash flow) The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing facil- ity. The project is expected to provide a series of positive cash flows for each of the next four years. The estimated cash flows associated with this project are as follows: Year Project Cash Flow 0 ? 1 $800,000 2 400,000 3 300,000 4 500,000 If you know that the project has a regular payback period of 2.5 years, what is the project's IRR?
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