
How many possible IRRs could you find for the following set of cash flows? 0 0...
Consider the following cash flows. How many different IRRs are there (hint: search between 20% and 70% )? What would be your decision? year Cash Flow 0 -504 1 2862 2 -6070 3 5700 4 -2000
3. Consider the following cash flows. How many different IRRs are there (hint: search between 20% and 70%)? What would be your decision? year Cash Flow -504 2862 2 -6070 5700 4 2000 0 4
Given the following cash flow, what does Descartes’ Rule tell us about the IRRs of this project? EOY Net CF There are 3 possible IRRs 0 -10,000 There are 2 possible IRRs 1 2,000 There is 1 possible IRR 2 4,000 There are 0 IRRs 3 -5500 A and B 4 6000 A and C 5 4000 None of the above – you must solve for the IRR
3. Consider the following cash flows. How many different IRRs are there (hint: search between 20% and 70%)? What would be your decision? year Cash Flow 504 2862 6070 5700 2000 0 3
Compute the sum of the two IRRs
4. The following cash-flow pattern has two IRRs. Use Excel to draw a graph of the NPV of these cash flows as a function of the discount rate. Then use the IRR function to identify the two IRRs. Would you invest in this project if the opportunity cost were 20%? 4 5 6 7 8 9 10 A Year 0 1 2 3 4 5 B Cash flow -500 600 300 300 200...
What is the IRR of the following set of cash flows? Year Cash Flow 0 –$11,242 1 3,900 2 6,700 3 6,800
What is the IRR of the following set of cash flows? Year Cash Flow 0 –$8,470 1 3,200 2 4,100 3 5,600
What is the IRR of the following set of cash flows? Year Cash Flow 0 –$6,363 1 3,800 2 3,100 3 3,000
What is the payback period for the following set of cash flows? Year Cash Flow 0 −$ 3,700 1 2,300 2 2,200 3 1,100 4 2,000 1.64 years 1.59 years 1.72 years 1.94 years 1.66 years
What is the payback period for the following set of cash flows? Year Cash Flow 0 −$ 1,900 1 1,500 2 1,900 3 2,000 4 1,900 Multiple Choice 1.27 years 1.16 years 1.21 years 1.51 years 1.23 years