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#7 A project forecasts the following cash flows: YEAR 0 1 2 3 5 7 Cash flow -$979.00 $174.00 $259.00 $299.00 $300.00 $250.00

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Answer #1

Let irr be x%
At irr,present value of inflows=present value of outflows.

979=174/1.0x+259/1.0x^2+299/1.0x^3+300/1.0x^4+250/1.0x^5+200/1.0x^6+100/1.0x^7

Hence x=irr=14.46%(Approx)

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