Question

Suppose that you are evaluating an investment opportunity with the following incremental free-cash-flows. What is difference between the largest and smallest discount rates that make the NPV equal to zero? Enter your answer as a percent, do not include the %. Round your final answer to two decimals.

Timeline	0	1	2	3	4
FCF	-37,000	40,000	30,000	-7,000	-27,000

Answer 1

Difference=16.34%

Timeline	FCF
0	-37,000
1	40,000
2	30,000
3	-7,000
4	-27,000
IRR-1	4.67%
IRR-2	21.01%

AutoSave o 9.3HD Book1 - Excel Sign in - 0 X File Home Insert Draw Page Layout Formulas Data Review View Help Tell me what you want to do Share Comments - 11 A = = 0 £47 Calibri BIU - B -A A = E Insert - Delete - Format Paste La- - General 3$ -% Number . Conditional Format as Formatting Table - Cell Styles Sort & Find & Filter - Select - Editing Clipboard Alignment Styles Cells D29 НА Timeline FCF -37000 40000 30000 -7000 -27000 IRR-1 IRR-2 Difference =IRR(C18:022) =IRR(C18:C22,100%) =C25-C24 29 20 ... Sheet4 Sheet3 Sheets Sheet6 Sheet7 Sheet8 Sheet9 Sheet10 Sheet11 st... : Ready + 100% E 2 AD -- - ENG 10:42 AM 0