Answered

Discover new perspectives and gain insights with IDNLearn.com's diverse answers. Our platform offers reliable and comprehensive answers to help you make informed decisions quickly and easily.

What is the IRR for the following project if its initial after tax cost is $5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3 and $1,300,000 in year 4

Sagot :

Fichohidn

Answer:

13.57%

Explanation:

Given the data :

Initial after tax cost = 5,000,000

Cash inflows:

Year 1 : $1,800,000

Year 2 : $1,900,000

Year 3 : $1,700,000

Year 4 : $1,300,000

The Internal rate of return can be obtained using the excel ;

IRR(Series of cash flow)

If the data above were inputed in an excel sheet from cell A1 to cell A4 ;

IRR(A1:A4)

Internal rate of return value obtained is 13.57%