I have a question about the capital budget in Finance, I don't know IRR, where they get IRR?

Like these questions where IRR is 27% and 26% from and how to find it?

Trident Ltd. is evaluating two independent projects. The costs and expected cash flows 3. are given in the following table. The company's cost of capital is 10 percent. Year $(312,500) $(395,000) $121,450 $153,552 1 $121,450 $158,711 2 $121,450 $166,220 3 $121,450 $132,000 4 $121,450 $122,000 Calculate the project's NPV. . Calculate the project's IRR. b. What is the decision based on NPV? What is the decision based on IRR? Is there C. a conflict? d. If you are the decision maker for the company, which project or projects will be accepted? Explain your reasoning. b. Project A Since NPV 0, to calculate the IRR, try rates higher than 10 percent Try IRR 27%. n NCF (1IRR) NPV = t 0 121,450 121,450 + 121,450 121,450 121,450 + -312,500 (1.27) (1.27)2 (1.27)3(1.27)4 (1.27)5 1 (1.27)5 = -312,500 +313,66 = $1, 166 =-312,500 + 121,450 x 0 0.27 Hint: If cash flow from year 1-year N are equal amount, the NPV formula could convert to x1- NCF NPV = -NCFo+ PV of ordinary annuity = -NCFo+ X (1+in i Where is IRR from and how to get IRR number? MAF203-Business Finance Seminar 7 (Topic 6) Try IRR 27.2%. NCFt NPV = -312,500 +312,418 = -$82 = 0 (1IRR) t=0 The IRR of Project A is approximately 27.2 percent. Using a financial calculator, we find that the IRR is 27.187 percent. Project B: 0, to calculate the IRR, try rates higher than 10 percent. Try IRR = 26%. Since NPV n NCF NPV = (1IRR) t-0 $153,552 $158,711 $166,220 $132,000 $122,000 (1.26)5 -$395,000 + (1.26)1 (1.26)3 (1.26)4 (1.26)2 = $717 Try IRR 26.1%. = where is IRR from? . NCF NPV = (1 IRR) t-0 $153,552 $158,711 $166,220$132,000 $122,000 (1.261)(1.261)(1.261)3 -$54 -$395,000 + (1.261)4(1.261)5 =_ The IRR of Project A is approximately 26.1 percent. Using a financial calculator, we find that the IRR is 26.093 percent. Since both projects have positive NPVS and they are independent projects, both should be accepted under the NPV decision criteria. Under the IRR decision criteria since both projects have IRRS greater than the cost of capital, both will be accepted. Thus, there is no conflict between the NPV and IRR decisions . be