4. Koepka Corp. has a project with the following cash flows: Year Cash Flow 0 $35,000 1 -27,000 2 29,000 What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. If there is no real IRR, enter '0'.)
4. Koepka Corp. has a project with the following cash flows: Year Cash Flow 0 $35,000 1 -27,000 2 29,000 What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. If there is no real IRR, enter '0'.)
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
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Transcribed Image Text:4. Koepka Corp. has a project with the following cash flows:
Year
Cash Flow
0
$35,000
1
-27,000
2
29,000
What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16. If there is no real IRR, enter '0'.)
Expert Solution
Step 1: Meaning of IRR and determine the variables in the question:
IRR of a project is the discount rate which makes net present value of the project equals to zero. Therefore, at IRR, NPV=0
Variables in the question:
| Year | Cash Flow ($) |
| 0 | 35000 |
| 1 | -27000 |
| 2 | 29000 |
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