Given the following cash flows calculate the IRR: Year 0 1 2 3 -4500 1100 1800...

Question

Question

Given the following cash flows calculate the IRR:

Year 0	1	2	3
-4500	1100	1800	1200

business finance

Answer 1

Answer #1

Let irr be x%
At irr,present value of inflows=present value of outflows.

4500=1100/1.0x+1800/1.0x^2+1200/1.0x^3

Hence x=irr=(4.47%)(Approx)(Negative).

Answer 2

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