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Given the popularity of IRR, you have decided to use it to evaluate a project. The...

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Finance

Given the popularity of IRR, you have decided to use it toevaluate a project. The cashflows from the project will be $40k,$42k and $28k in years 1 through 3. After that the project willyield cashflows of $20k per year, forever. The project’s initialcost is $450k and the firm’s opportunity cost/hurdle rate is 7%.Write down the equation used to solve for the IRR (do not solve forthe actual IRR). Does the project have conventional cashflows?

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3.7 Ratings (419 Votes)
Solution IRR is the Internal Rate of return and It is the rate of retrunat which the Present value of cash inflows is equal to the    See Answer
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