Answer:
18.11%
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator
Cash flow in year 0 = $-112,800
Cash flow in year 1 = $38,200
Cash flow in year 2 = $46,900
Cash flow in year 3 =$57,600
Cash flow in year 4 =$23,100
IRR = 18.11%
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Answer:
Explanation:
Cash flow is 530 , 690 , 875 and 1090 in 1st to 4 th year respectively
discount rate = 10 %
NPV = 530/ 1.10 + 690 / (1.10)² + 875/(1.10)³ + 1090/ (1.10)⁴
= (530x1.10³ + 690 x 1.10² + 875x 1.10 + 1090)/ 1.10⁴
= (705.43 x +834.9 +962.5 +1090)1.10⁴
= 3592.83 / 1.10⁴
= 2453.95
Discount rate 18%
NPV = 530/ 1.18 + 690 / (1.18)² + 875/(1.18)³ + 1090/ (1.18)⁴
= (530x1.18³ + 690 x 1.18² + 875x 1.18 + 1090)/ 1.18⁴
= (870.80696 +960.756 +1032.5 +1090)1.18⁴
= 2039.46
Discount rate 24%
NPV = 530/ 1.24 + 690 / (1.24)² + 875/(1.24)³ + 1090/ (1.24)⁴
= (530x1.24³ + 690 x 1.24² + 875x 1.24 + 1090)/ 1.24⁴
1010.51072+ 1060.944+1085+1090 / 1.24⁴
= 1796.14
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Answer:
The ending cash balance is $40,000
Explanation:
Kindly check attached picture for detailed explanation on Cash Flow statement
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