1)Sandy Grey Ltd is in the process of deciding whether or not to revise its line of mobile phones that it manufactures and sells. Its sole market is large corporations, and it has not as yet focused on the retail sector. The company has estimated that the revision will cost 220,000. Cash flows from increased sales will be 80,000 in the first year. These cash flows will increase by 5 per cent per year. The company estimates that the new line will be obsolete five years from now. Assume the initial cost is paid now, and all revenues are received at the end of each year. If the company requires a 10 per cent return for such an investment. Should it undertake the revision?

A.Use NPV,

B.IRR, and

C.Profitability Index (PI) investment evaluation techniques to arrive at your answer.

Can you tell me how to manually calculate the IRR please - I can do it in excel but would like to see it on paper - In excel I get a value of 27.69%

Thanks