Using a range of discount rates between 5% and 8% p.a., establish by trial and error the

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Using a range of discount rates between 5% and 8% p.a., establish by trial and error the internal rate of return of the following project:

Year 0 Cash outflow £20,000 Year 1 Cash inflow £6,700 Year 2 Cash inflow £8,600 Year 3 Cash inflow £8,100 Relevant discount factors are:

Year Discount rate 5% 6% 7% 8%

1 0.952 0.943 0.935 0.926 2 0.907 0.890 0.873 0.857 3 0.864 0.840 0.816 0.794

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Accounting And Finance For Business

ISBN: 9780273773948

1st Edition

Authors: Geoff Black, Mahmoud Al-Kilani

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