Question
Project Delta has the following cash flows: CF 0 $1,000,000 CF 1 $100,000 CF 2 $500,000 CF 3 $500,000 CF 4 $30,000 Calculate the projects
Project Delta has the following cash flows:
CF 0 –$1,000,000
CF 1 $100,000
CF 2 $500,000
CF 3 $500,000
CF 4 $30,000
Calculate the project’s IRR given a required rate of return of 22%. NPV @ r =22% = –$293,206
Step by Step Solution
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SOLUTION To calculate the projects internal rate of return IRR we need to find the discount rate that makes the net present value NPV of the cash flows equal to zero Since we know that the required rate of return is 22 we can use the NPV formula with a discount rate of 22 to find the projects NPV The NPV formula is NPV CF0 CF1 1r1 CF2 1r2 CF3 1r3 CF4 1r4 where CF0 is the initial cash flow ...
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Calculus With Applications
Authors: Margaret L. Lial
12th Edition
978-0135871348, 0135871344
