Question

Consider the infinite cash-flow series with repeated cash-flow patterns given in the table below. Determine i for this infini
An -$2,100 0 ,900 1 1,200 2 - 2,100 1,800 900 4 1,200 5 -2,100 1,800 6 900 7 1,200 8
0 0
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Answer #1

Let i* be IRR

(-2100+900/(1+i)+1200/(1+i)^2+1800/(1+i)^3)/(1-1/(1+i)^3)=0
=>i=33.625%

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