Question: 1.) The Internal Rate of Return function (IRR (values, [guess]) is a caluculation of the interest paid with an inital investment ( - ) and
1.) The Internal Rate of Return function (IRR (values, [guess]) is a caluculation of the interest paid with an inital investment ( - ) and subsequent periodic returns ( + ). A relative has approached you with an opportunity to invest in his new invention. Let's call this a base investment and it has an IRR of 11%. The relative offers 6 yearly payments (20000, 30000, ......, 15000) for an inital loan of 100000. Additionally, the relative also offers 3 other investment options. You decide to build a table that calculates the IRR for the other investments. These investments are all a variation of the base. For example, Investment 2 asks for 25%; thus, Return yr1 + 25000 Return yr2 is 375000, etc.
| Increase in PMT relative to base= | 25% | 35% | 20% | ||
| Increase in RTN relative to base= | 25% | 30% | 20% | ||
| Base | Invsmt2 | Invsmt3 | Invsmt4 | ||
| IRR | 10.99% | ||||
| PMT | -100000 | ||||
| Return yr1 | 20000 | ||||
| Return yr2 | 30000 | ||||
| Return yr3 | 25000 | ||||
| Return yr4 | 25000 | ||||
| Return yr5 | 25000 | ||||
| Return yr6 | 15000 |
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