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Simms Corp. is considering a project that has the following cash flow data. What is the...

Simms Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected.

Year    0   1     2 3

Cash flows -$1,125 $425 $425 $425

1 0
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Answer #1

IRR is calculated using the RATE function as follows:-

=RATE(nper,pmt,pv)

=RATE(3,425,-1125)

=6.53%

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