1. Given the following annual net cash flows, determine the internal r

QUESTION

1. Given the following annual net cash flows, determine the internal rate of return to the nearest whole percent of a project with an initial outlay of $750,000.YEAR NET CASH FLOW1 $500,0002 $150,0003 $250,0009%11%13%15%2. J.B. Enterprises purchased a new molding machine for $85,000. The company pai¦
1) Given the following annual net cash flows, determine the internal rate of return to the nearest whole percent of a project with an initial outlay of $750,000. YEAR NET CASH FLOW 1 $500,000 2 $150,000 3 $250,000 The IRR can be found by summing the cashflows, discounted with a rate r and putting that equal to the initial outlay. Solving for r gives you the IRR. In this case $750,000 =¦

1 r) $150,000/(1 r)^2 $250,000/(1 r)^3 I find r= 11,45% or 11% rounded 4) If Depreciation expense in year one of a project increases for a highly profitable company net income decreases and incremental free cash flow increases please dont forget to rate my answer

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