Internal Rate of Return (IRR) 7. Calculate the IRR of a project with initial cash outflow of $5,000 and will be sold at the end of year 5 for $2,500. The project produces the following cash flows: year 1) +$700; year 2) +$600; year 3) +$500; year 4) +$400; year 5)+300. 8. Calculate the IRR of a machine, bought for $10,000, sold at the end of year 5 for $3,500, and produces the following cash flows: year 1) +$300; year 2) +$600; year 3) +$1,200; year 4) +$2,400; year 5) +$4,800. 9. Calculate the IRR of a machine, bought for $6,000, sold at the end of year 5 for $2,000, and produces the following cash flows: year 1) +$2,000; year 2) +$1,750; year 3) +$1,500; year 4) +$1,000; year 5) +$500. 10. Let's say a company is considering a project that requires an initial investment of $100,000. The project is expected to generate the following cash flows over the next five years. Calculate the IRR. Year 1: $30,000, Year 2: $35,000, Year 3: $40,000, Year 4: $45,000, Year 5: $50,000 11. ABC Corporation is considering investing in a new manufacturing plant. The initial cost of the plant is $1,500,000. The plant is expected to generate cash flows of $400,000 per year for the next 7 years. After 7 years, the plant will be sold for $300,000. Calculate the IRR. 12. Giant Corp is considering investing in a new production facility. The initial investment required for this project is $500,000. The facility is expected to generate cash flows over the next five years. Due to market conditions and operational uncertainties, the cash flows are projected to be uneven as follows: Year 1: $50,000 Year 2: $100,000 Year 3: $150,000 Year 4: $200,000 Year 5: $250,000. Calculate the IRR of this investment. 4