Question

Roxy is considering a new cat food factory with the following cash flows, what is the IRR?

I need to learn steps with BA ll plus calculator if needed.

Year	CF
0	$    (250,000.00)
1	40,000.00
2	120,000.00
3	80,000.00
4	30,000.00
5	25,000.00
6	15,000.00

		8.16%
		9.42%
		8.32%
		10.12%

Answer 1

Internal rate of return is calculated using a financial calculator by inputting the below in a financial calculator:

• Press the CF button.
• CF0= -$250,000. It is entered with a negative sign since it is a cash outflow.
• Cash flow for each year should be entered.
• Press Enter and down arrow after inputting each cash flow.
• After entering the last cash flow cash flow, press the IRR button and CPT keys to get the IRR of the project.

The IRR is 8.32%.

Hence, the answer is option c.

In case of any query, kindly comment on the solution.