Q4 You are looking at an investment that requires you to invest $51 today. You'll get...

Question

Question

Answer 1

Answer #1

CALCULATION OF INTERNAL RATE OF RETURN


Year	0	1	2	IRR

Initial Investment'	51.00

Total investment	51.00	0.00	0.00

Cash Inflow	0.00	100.00

Cash Outflow	0.00	25.00	25.00

Gross cash inflow	0.00	75.00	-25.00

Net Cash flow	-51.00	75.00	-25.00	-4.01%

Internal Rate of Return is -4.01%

Answer 2

Similar Homework Help Questions

Suppose you invest $ 3,500 today and receive $ 9,000 in five years. a. What is...

Suppose you invest $ 3,500 today and receive $ 9,000 in five years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $ 3,500 upfront, but pays an equal amount at the end of each year for the next five years. If this investment has the same IRR as the first one, what is the amount you will receive each year?
If you invest $10,000 today and earn a 20% annual internal rate of return (IRR) over...

If you invest $10,000 today and earn a 20% annual internal rate of return (IRR) over five years (with all of the proceeds received at the end of the fifth year), then the amount you will receive at the end of the fifth year is: How much would you pay today for an investment offering a lump sum of $100,000 in five years if you hoped to earn an annual rate of return of 25%? You invest $300,000 today and...
You have an investment opportunity that requires an initial investment of $2,500 today and will pay...

You have an investment opportunity that requires an initial investment of $2,500 today and will pay $4,100 in one year. What is the rate of return of this opportunity? The rate of return for this opportunity is %. (Round to two decimal places.)

Assume you pay -$500 out today to invest in a project that you expect will return...

Assume you pay -$500 out today to invest in a project that you expect will return +$530 in one year from today. What is the NPV (Answer in the form #,###.00) & IRR of this project if the discount rate is 8%? Provide the solution in excel with formula screen shots
a. You are saving for retirement 10 years from now. How much should you invest today...

a. You are saving for retirement 10 years from now. How much should you invest today so you will have an annuity of $20,000 per year for 20 years starting from the 11" year? b. If you were to invest $10,000 today @6%, how much would you have at the end of 15 years? C. You are planning to save $100,000 for a yacht purchase 5 years from now. If you believe you can earn an 8% rate of return,...
Assume you invest $8,400 today in an investment that promises to return $ 32,223 in exactly...

Assume you invest $8,400 today in an investment that promises to return $ 32,223 in exactly 10 years. a. Use the present-value technique to estimate the IRR on this investment. b. If a minimum annual return of 17 % is required, would you recommend this investment? a. The IRR of the investment is nothing %.

Assume you invest $ 3,100 today in an investment that promises to return $ 6,711 in...

Assume you invest $ 3,100 today in an investment that promises to return $ 6,711 in exactly 10 years. a. Use the present-value technique to estimate the IRR on this investment. b. If a minimum annual return of 13 % is required, would you recommend this investment? a. The IRR of the investment is ______%.(Round to the nearest whole percent.) b. If a minimum return of 13 % is required, would you recommend this investment?
A money manager is looking at various investment options. Her clients are looking to invest some...

A money manager is looking at various investment options. Her clients are looking to invest some excess cash in a low-risk investment and do not anticipate needing this cash for a minimum of two years. Currently, the manager can invest her clients' money for one year at an effective annual rate of 3.889% with the intention of reinvesting the money for an additional year at whatever prevailing one-year spot interest rates are one year from today. Alternatively, she can make...
Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide...

Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now. The Internal Rate of return of this project is closest to: 10.2% 12.2% 14.2% 16.2%

You have an investment opportunity that requires an initial investment of $8,000 today and will pay $7,500 in one year. What is the IRR of this opportunity?

You have an investment opportunity that requires an initial investment of $8,000 today and will pay $7,500 in one year. What is the IRR of this opportunity?