Question: a) When considering an energy management project, what is your understanding of Internal Rate of Return (IRR)? 3 Marks b) Assuming you are contracted by

a) When considering an energy management project, what is your understanding

a) When considering an energy management project, what is your understanding of Internal Rate of Return (IRR)? 3 Marks b) Assuming you are contracted by a client to advise and propose to them a new heating and cooling energy system installation project that requires an initial capital investment of 27,000. The cash flows that are expected to be generated by the project are shown in the table below. Year Cash Flow () 0 1 2 3 - 27,000.00 +9,000.00 +6,500.00 +6,000.00 +5,000.00 +3,110.00 +3,050.00 +3,000.00 4 5 6 7 Based on the cash flow data given in the table above, determine the Internal Rate of Return (IRR) for the project being proposed. Please Note:A range of discount rates is given as 2 16% 22 Marks

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