A project yields the following set of cash flows. What is the internal rate of return of thisproject? Assume the required rate of return is 5%.ооOYearCash Flows ($)0-9,2501211,50021,30032,50042,6005672,6002,6002,600a.13.58%b. 14.80%C. 10.92%d. 12.29%e. 8.58%

Step 1 : Apply irr formala Step 2: cf0+cf1/(1+irr)2........................cfn/(1+irr)n Step 3: Step…

Answered: A project yields the following set of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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onsider the following cash flows: C0=-$42 C1=+$38 C2=+$38 C3=+$38 C4=-$76 a. Which two of the following rates are the IRRs of this project?
A project is being analyzed with the following set of cash flows. Calculate the internal rate of return (IRR). (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Cash Year Flow 0 16,000 123 6,700 8,000 6,500 IRR %
6.Calculate the project's Modified Internal Rate of Return (MIRR). What critical assumption does the MIRR make that differentiates it from the IRR? TIP : look for the definition of Modified Internal Rate of Return, and then do it in excel, easy !!! Year Net Cash flow Future Value of Net Cash flow 0 -$20.8 example 1 $4.5 $7.97 (n=6, i=10%)=fv(.1,6,,4.5) 2 $6.3 (n=5, i=10%) 3 $5.2 (n=4, i=10%) 4 $3.9 (n=3, i=10%) 5 $2.1 (n=2, i=10%) 6 $1.3 (n=1, i=10%) 7 $0.5 (n=0, i=10%) Sum = $XX.XX MIRR = ( in excel ) Rate ( 7,-20.8, xx.xx) 7.Where does the value of MIRR fall relative to the discount rate and IRR?
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Consider the following cash flows: C0=-$42 C1=+$38 C2=+$38 C3=+$38 C4=-$76 a. Which two of the following rates are the IRRs of this project? check all that apply 2.5% 7.8% 14.3% 32.5% 40.0% b. What is project NPV if the discount rates are 5%, 20%, 40%? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 3 decimal places.)
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A project yields the following set of cash flows. What is the internal rate of return of this project? Assume the required rate of return is 5%. оо O Year Cash Flows ($) 0 -9,250 12 1 1,500 2 1,300 3 2,500 4 2,600 567 2,600 2,600 2,600 a. 13.58% b. 14.80% C. 10.92% d. 12.29% e. 8.58%