Global Eagle is evaluating a project with the following cash flows: Initial cash outflow at t=0...
Global Eagle is evaluating a project with the following cash flows: Initial cash outflow at t=0 is -$350, while cash inflow at t=1 is $14, at t=2 is $52, at t=3 is $106, at t=4 is $193, and at t=5 is $295. Global Eagle’s required rate of return is 9%. 11c) What is the project's IRR?
Homework Answers
Let irr be x%
At irr,present value of inflows=present value of outflows.
350=14/1.0x+52/1.0x^2+106/1.0x^3+193/1.0x^4+295/1.0x^5
Hence x=irr=17.32%(Approx).
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