Compute internal rate of return

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Question: Issues with Internal Rate of Return:

1. Investing or Borrowing: watch the direction of cash flows 1 2 3 C0 C1 C2 C3 IRR NPV @ 10% 1,200.00 (3,500.00) 4,450.00 (2,000.00) Restate Cash Flows from Above C0 C1 C2

2. Differing Patters of Cash Flow Project C0 C1 C2 C3 C4 C5 IRR NPV @ .10 NPV @ .10 G (11,000.00) 7,000.00 8,000.00 4,000.00 (2,000.00) 2,500.00 H * (11,000.00) 2,000.00 * Project H is a perpetuity whose cash flows are assumed to continue indefinately Project Discount Rate NPV G NPV H 0.05 0.08 0.10 0.12 0.15 0.16 0.00 0.20 0.25 0.33 0.00

Reference no: EM131441974

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