Question

What is the IRR for a project that costs $100,000 and provides annual cash inflows of $30,000 for 6 years starting one year from today

Answer 1

Answer:

19.91 %

Explanation:

The Internal Rate of Return (IRR) is the Interest rate that will make the present values of cashflows equal to the price of the Initial investment.

Calculation of IRR of Project A using a Financial Calculator :

($100,000) CFj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

$30,000         Cfj

Shift IRR/YR 19.9054 or 19.91 %