Assume that an investment has the cash flows shown in the table below

Year	Cashflow
0	-1000
1	400
2	300
3	700
4	600
5	800
6	100
7	200
8	360
9	500
10	-3660

2.1) Plot the graph of NPV versus discount rate (assume interest rates in the range 0%-100%) and estimate the IRR of the graph. What do you notice?
2.2) Now consider an investment plan where for t=0,5,6,7,10 the signs of the cashflows are reversed. What happens to the IRR?
2.3) Repeat 2.1 with the original cash flow table, assuming that for t=10 we have a positive cash flow (+3660). What do you notice on the graph?
2.4) For the cash flow table below, calculate in detail (not using Excel ) the IRR by solving the related polynomial equation.

Answer rating: 100% (QA)

Here are the stepbystep calculations for each question 21 Cash flows Y01000 Y1400 Y2300 Y3700 Y46... View the full answer