We know the following data of an investment that the company has made: An initial disbursement of €2,000,000 and generates the collections and payments in the successive years of its duration that are shown in the following table: Years Collections € Payments € 1 4,500,000 3,800,000 2 5,500,000 4,500,000 3 6,000,000 5,000,000 4 4,000,000 3,200,000 Calculate the IRR of the previous project. Justify for what type of discount this investment will be made.
We know the following data of an investment that the company has made: An initial disbursement of €2,000,000 and generates the collections and payments in the successive years of its duration that are shown in the following table: Years Collections € Payments € 1 4,500,000 3,800,000 2 5,500,000 4,500,000 3 6,000,000 5,000,000 4 4,000,000 3,200,000 Calculate the IRR of the previous project. Justify for what type of discount this investment will be made.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 10EA: You have been depositing money into an account yearly based on the following investment amounts,...
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We know the following data of an investment that the company has made:
An initial disbursement of €2,000,000 and generates the collections and payments in the successive years of its duration that are shown in the following table:
Years |
Collections € |
Payments € |
1 |
4,500,000 |
3,800,000 |
2 |
5,500,000 |
4,500,000 |
3 |
6,000,000 |
5,000,000 |
4 |
4,000,000 |
3,200,000 |
Calculate the IRR of the previous project. Justify for what type of discount this investment will be made.
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