Suppose a particular investment project will generate an immediate cash inflow of $1,000,000 followed by cash...

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Finance

Suppose a particular investment project will generate animmediate cash inflow of $1,000,000 followed by cash outflows of$500,000 in each of the next three years. What is the project’sIRR? Suppose a company’s hurdle rate is 15%, should it accept theproject? I need to learn steps with BA ll pluscalculator if needed.
23%; reject the project
23%; accept the project
15%; reject the project
15%; accept the project

Answer & Explanation Solved by verified expert

4.1 Ratings (784 Votes)

Internal Rate of Return IRR for the Project Step 1 Firstly calculate NPV at a guessed discount Rate Say 20 R1 Year Annual Cash Flow Present Value factor at 20 Present Value of Cash Flow 1 500000 0833333 416667 2 500000 0694444 347222 3 See Answer

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Transcribed Image Text

Suppose a particular investment project will generate animmediate cash inflow of $1,000,000 followed by cash outflows of$500,000 in each of the next three years. What is the project’sIRR? Suppose a company’s hurdle rate is 15%, should it accept theproject? I need to learn steps with BA ll pluscalculator if needed.23%; reject the project23%; accept the project15%; reject the project15%; accept the project

		23%; reject the project
		23%; accept the project
		15%; reject the project
		15%; accept the project