Quantitative Methods Q55
55The table below shows the after-tax cash flows of a project:
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
| Cash flow (€) | -50,000 | 35,000 | 25,000 | 10,000 | 2,000 | 2,000 | 3,000 |
The IRR of the project is closest to:
- Option : A
- Explanation : Using a financial calculator, compute IRR: CF0 = –50,000, CF1 = 35,000, CF2 = 25,000, CF3 = 10,000, CF4 = 2,000, CF5 = 2,000, and CF6 = 3,000, CPT IRR. The IRR is 27.05%.
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