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Q9. Calculate the NPV and IRR for the cash flows given below, using a required return of 11%. Discuss whether the IRR is reliable in
Q9. Calculate the NPV and IRR for the cash flows given below, using a required return of 11%. Discuss whether the IRR is reliable in this situation. | ||||||||
Year | Cash flow | |||||||
0 | $ (650,000) | |||||||
1 | $ 125,000 | |||||||
2 | $ 150,000 | |||||||
3 | $ 125,000 | |||||||
4 | $ 100,000 | |||||||
5 | $ 80,000 |
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