Question
how does the 65.36% comes out and how to calculate? Period 0 1 3 3 4 5 Conventional cash flows (Rs.) -25,000 6,000 8,000 9,000
how does the 65.36% comes out and how to calculate?
| Period | 0 | 1 | 3 | 3 | 4 | 5 |
|---|---|---|---|---|---|---|
| Conventional cash flows (Rs.) | -25,000 | 6,000 | 8,000 | 9,000 | 7,000 | 13,000 |
| Non-conventional cash flows (Rs.) | -17,000 | 16,000 | 16,000 | 16,000 | 16,000 | -52,000 |
The first series is the conventional cash-flow pattern, which has one sign change, i.e. it has initial cash out flow followed by five continuous periods of net cash inflows. It has one IRR, which is 18.95%.
The second series is non-conventional cash-flow pattern, which has two sign changes. It has cash outflow followed by cash inflows followed by cash outflow. It has two IRRs, 6.77% and 65.36%.
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Project Finance For Construction
Authors: Anthony Higham, Carl Bridge, Peter Farrell
1st Edition
1138941298, 978-1138941298
