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:, what are the IRRs Internal rate of return and modified internal rate of return. Quark Industries has three potential proje

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IRR is the rate at which PV of Cash Inflows are equal to PV of Cash Outflows

Project M:

Year CF PVF @12% Disc CF PVF @13% Disc CF
0 $ -18,00,000.00     1.0000 $ -18,00,000.00     1.0000 $ -18,00,000.00
1 $     5,00,000.00     0.8929 $     4,46,428.57     0.8850 $     4,42,477.88
2 $     5,00,000.00     0.7972 $     3,98,596.94     0.7831 $     3,91,573.34
3 $     5,00,000.00     0.7118 $     3,55,890.12     0.6931 $     3,46,525.08
4 $     5,00,000.00     0.6355 $     3,17,759.04     0.6133 $     3,06,659.36
5 $     5,00,000.00     0.5674 $     2,83,713.43     0.5428 $     2,71,379.97
NPV $          2,388.10 $      -41,384.37

IRR = Rate at which least +ve NPV + [ NPV at that Rate / Change in NPV due to 1% inc in Disc Rate ] * 1%

= 12% + [ 2388.10 / 43772.47 ] * 1%

= 12% + 0.05%

= 12.05%

IRR of Project M is 12.05%

Pls comment, if any further assistance is required.

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