Discounted Cash Flow

Year (n)	0	1	2	3	4
Undiscounted cash flow	-$600,000	$200,000	$200,000	$200,000	$200,000
DCF @ 11%
DCF @11%
DCF @ 13%
DCF @13%
DCF @ 15%
DCF @15%

Notes:

• DCF = Discounted Cash Flow
• DCF = Cumulative Discounted Cash Flow
• Refer to the following video on how to calculate IRR with Excel.

Provide your completed spreadsheet in the space below. Alternatively, do the exercise in Excel and enter the values back into the table above.

1. What are the NPVs for 11%, 13% and 15% respectively?
2. Based on your results above; what is the approximate IRR (and why)?

Calculate the exact IRR with Excel (to 1 decimal place).