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Assume that an investment has the cash flows shown in the table below Year Cashflow 0 -1000 1 400 2 300 3 700 4 600

Assume that an investment has the cash flows shown in the table below

YearCashflow
0-1000
1400
2300
3700
4600
5800
6100
7200
8360
9500
10-3660

2.1) Plot the graph of NPV versus discount rate (assume interest rates in the range 0%-100%) and estimate the IRR of the graph. What do you notice?
2.2) Now consider an investment plan where for t=0,5,6,7,10 the signs of the cashflows are reversed. What happens to the IRR?
2.3) Repeat 2.1 with the original cash flow table, assuming that for t=10 we have a positive cash flow (+3660). What do you notice on the graph?
2.4) For the cash flow table below, calculate in detail (not using Excel ) the IRR by solving the related polynomial equation.


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