part 3 4 solution needed YearNet cashflows0-575,0001£125,0002£248,0003£176,0004£146,000 Task 7Supera Ltd are looking to invest in a new 4 year project with an initial outlay of£575,000. The project is in a line of business where Supera Ltd. has limited previousexperience. All cash inflows occur at the end of each year.YearNet cashflows0(575,000)1£125,0002£248,0003£176,0004£146,000i)Calculate the IRR of the project by discounting the cashflows by 4% and 8% andthen applying the IRR formula - perform your workings on excel includingformulas. A copy of the data above is provided in the "Task 7 - Data" tab of theExcel file "MBF Summative data.xlsx". There is also a present value table on thelast tab of the same excel file.Check your answer using the IRR function in exceliii)Supera Ltd has a set hurdle rate of 7.5% for projects. Assess whether or not itshould accept the project based on your calculations and other informationprovided.iv)Explain one advantage and one disadvantage of the IRR technique of investmentappraisal.

Internal Rate of Return: It is the rate at which the net present value of an investment or project…

iii) Supera Ltd has a set hurdle rate of 7.5% for projects. Assess whether or not it should accept the project based on your calculations and other information provided. iv) Explain one advantage and one disadvantage of the IRR technique of investment appraisal.

iii) Supera Ltd has a set hurdle rate of 7.5% for projects. Assess whether or not it should accept the project based on your calculations and other information provided. iv) Explain one advantage and one disadvantage of the IRR technique of investment appraisal.

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

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Question

part 3 4 solution needed

Year	Net cashflows
0	-575,000
1	£125,000
2	£248,000
3	£176,000
4	£146,000

Task 7
Supera Ltd are looking to invest in a new 4 year project with an initial outlay of
£575,000. The project is in a line of business where Supera Ltd. has limited previous
experience. All cash inflows occur at the end of each year.
Year
Net cashflows
0
(575,000)
1
£125,000
2
£248,000
3
£176,000
4
£146,000
i)
Calculate the IRR of the project by discounting the cashflows by 4% and 8% and
then applying the IRR formula - perform your workings on excel including
formulas. A copy of the data above is provided in the "Task 7 - Data" tab of the
Excel file "MBF Summative data.xlsx". There is also a present value table on the
last tab of the same excel file.
Check your answer using the IRR function in excel
iii)
Supera Ltd has a set hurdle rate of 7.5% for projects. Assess whether or not it
should accept the project based on your calculations and other information
provided.
iv)
Explain one advantage and one disadvantage of the IRR technique of investment
appraisal.

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