Answered step by step
Verified Expert Solution
Question
1 Approved Answer
What formula do I use to calculate the Effective Cost of Borrowing (IRR in excel) for the following cash flows. Years Cashflows 0 $ (94,000.00)
What formula do I use to calculate the Effective Cost of Borrowing (IRR in excel) for the following cash flows.
| Years | Cashflows |
| 0 | $ (94,000.00) |
| 1 | 884.91 |
| 2 | 833.33 |
| 3 | 786.50 |
| 4 | 744.30 |
| 5 | 706.57 |
| 6 | 698.12 |
| 7 | 705.77 |
| 8 | 712.64 |
| 9 | 718.74 |
| 10 | 724.03 |
| 11 | 728.49 |
| 12 | 732.11 |
| 13 | 734.87 |
| 14 | 736.76 |
| 15 | 737.74 |
| ECB | IRR= |
- To calculate ECB, IRR function has to be used using annual payments for cash-flows. However the payments have to be calculated monthly and then annualized (PMT*12)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Governing The Modern Corporation Capital Markets Corporate Control And Economic Performance
Authors: Roy C. Smith, Ingo Walter
1st Edition
0195171675,0199924015
