Compute the IRR static for Project E. The appropriate cost of capital is 8 percent. (Do...

Question

Question

Compute the IRR static for Project E. The appropriate cost of capital is 8 percent. (Do not round intermediate calculations a

business finance

Answer 1

Answer #1

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

1300=470/1.0x+570/1.0x^2+580/1.0x^3+360/1.0x^4+160/1.0x^5

Hence x=irr=22.37%(Approx).

Hence since irr is greater than cost of capital;project must be accepted.

Answer 2

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