Question

47. Mejean Renovations Inc. is considering a project whose cash flows are as follows: Year 0: -$1,000; Year 1: $300; Year 2: $290; Year 3: $280; Year 4: $270. What is the project's IRR?

Answer 1

Given about Mejean Renovations Inc.'s project,

Cash flows are as follow:

C0 = -$1000

CF1 = $300

CF2 = $290

CF3 = $280

CF4 = $270

IRR of the project can be calculated on financial calculator using following values;

Press on CF button

enter CF0 = -1000

C01 = 300

F01 = 1

C02 = 290

F02 = 1

C03 = 280

F03 = 1

C04 = 270

F04 = 1

compute for IRR, we get IRR = 5.56

So, IRR of the project = 5.56%