Example Company Y is planning to undertake another project requiring initial investment of $400,000 and is expected to generate $100,000 in Year 1, $200,000 in Year 2, $180,000 in year 3, $120,000 in Year 4 and $100,000 in Year 5. Calculate the average rate of return of the project. Cumulative Cash Flow Solution (in $'000s) Year Cash Flow 0 (400) 1 100 w N- (400) (300) (100) 200 180 80 4 120 200 5 100 300