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Please solve it in excel... thank you! Issues with Internal Rate of Return: 1. Investing or Borrowing: watch the direction of cash flows 1 2
Please solve it in excel... thank you!
Issues with Internal Rate of Return: | |||||||||
1. Investing or Borrowing: watch the direction of cash flows | |||||||||
1 | 2 | 3 | |||||||
C0 | C1 | C2 | C3 | IRR | NPV @ 10% | ||||
1,200.00 | (3,500.00) | 4,450.00 | (2,000.00) | ||||||
Restate Cash Flows from Above | |||||||||
C0 | C1 | C2 | |||||||
2. Differing Patters of Cash Flow | |||||||||
Project | C0 | C1 | C2 | C3 | C4 | C5 | IRR | NPV @ .10 | NPV @ .10 |
G | (11,000.00) | 7,000.00 | 8,000.00 | 4,000.00 | (2,000.00) | 2,500.00 | |||
H * | (11,000.00) | 2,000.00 | |||||||
* Project H is a perpetuity whose cash flows are assumed to continue indefinately | |||||||||
Project | Discount Rate | NPV G | NPV H | ||||||
0.05 | |||||||||
0.08 | |||||||||
0.10 | |||||||||
0.12 | |||||||||
0.15 | |||||||||
0.16 | |||||||||
0.00 | |||||||||
0.20 | |||||||||
0.25 | |||||||||
0.33 | |||||||||
0.00 | |||||||||
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