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A project requires an investment of $ 24000 at time 0 and generates an inflow of $ 5000 per year for 8 years. With the inflow oCuring in one year time. What is the IRR?
Cold you please solve in detail to get the answer 13%.
take 15% and 10% discount rate!!
under 15% PV is 22450 and so NPV is =(24000-22450)=(1550)
under 10% PV is 26650 and so NPV is =(24000-26650)=2650so, IRR is, 10%+{2650/4200]*5%=13%
jonyrazib – please don’t answer in this forum. This one is the Ask the Tutor Forum, and you are not the tutor 🙂
chhaya: johnrazib is correct (and I do suggest that you watch the free lectures on this)
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