II. What is the internal rate of return of the investment illustrated in the cash flow diagram of Figure 2? G: 4 50 A = $250 * yoslams $ 2,090 Figure 2. Cash flow diagram. IRR function : This function calculates the internal rate of return (IRR) for a series of cash flows that occur at evenly spaced intervals. Referring to the figure below, the values of the cash flows dy (j = 0, 1, ..., N) must be provided to the function even if some of them are equal to zero. It is also important to note that the first value in the list of values provided to the function corresponds to the cash flow occuring at time 0. Syntax : IRR(values, [estimate] ). The estimate acts as an initial guess of the IRR. to help MS Excel's algorithm in finding the true solution. It typically does not need to be provided. IN-1 N - 1 To i. On a new spreadsheet, enter Year in Al and Cash flow in B1. ii. In A2:A9, enter the numbers from 0 to 7. iii. In B2:B9, enter the values of the cash flows (see Figure 2). iv. In All, enter IRR: v. In B11, enter =IRR(B2:B9). You should obtain 8.04% as a result for the investment's IRR. 7