Question

Use a financial calculator or an Excel spreadsheet to estimate the IRR for the following investment The yield for investment Ais %. (Round to two decimal places.) Data Table Year $2,314 Initial Future End of Investment Investment Value $1,600 $9,300 $17.800 $700 $4,110 $2,900 $4,256 $5,500 $20.996 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.

Answer 1

Below is the table which shows the values we need to input in the financial calculator and then compute the IRR or the I/Y that will result in the IRR values as suggested by the below table:

FV 4 Initial investment Future value End of Year Payment IRR Investment PV PMT 1/Y -1600 2314 0 9.66% -9300 17800 09.72% -700 4110 0 9.25% -2900 4256 0 6.60% -5500 20996 05.50% в

• Terminology of the financial calculator is highlighted in green
• PV is entered as a negative figure because it is an outflow that will result in a positive inflow in the form of the FV
• PMT = 0 for all the investments.
• By inputting these values, and pressing the cpt and I/Y number, we have calculated them and these computed values are highlighted in yellow