Determine the IRR of the following cashflow. Clue: Modify the CFD one step at a time to gradually eliminate the multiple sign reversals by investing wisely. MARR=10% Is this a good investmemt? Year -400 1 400 2 -180 3. -180 4 +180 600 6. -180 7. 1,000

Determine the IRR of the following cashflow. Clue: Modify the CFD one step at a time to gradually eliminate the multiple sign reversals by investing wisely. MARR=10% Is this a good investmemt? Year -400 1 400 2 -180 3. -180 4 +180 600 6. -180 7. 1,000

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 25SP: Start with the partial model in the file Ch07 P25 Build a Model.xlsx on the textbook’s Web site....

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Determine the IRR of the following cashflow. Clue: Modify the CFD one step at a time to gradually
eliminate the multiple sign reversals by investing wisely. MARR=10% Is this a good investmemt?
Year
-400
400
-180
3
-180
4
+180
5
600
6.
-180
7
1,000

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