Question: (IRR, payback, and calculating a missing cash flow) Mode Publishing is considering building a new printing facility that will involve a large initial outlay and
(IRR, payback, and calculating a missing cash flow) Mode Publishing is considering building a new printing facility that will involve a large initial outlay and then result in a series of positive free cash flows for 4 years. The estimated cash flows associated with this project are:
| YEAR | PORJECT CASH FLOW |
| 0 (initial outlay) | ? |
| 1 | $ 800 million |
| 2 |
400 million |
| 3 |
300 million |
| 4 |
500 million |
If you know that the project has a regular payback of 2.5 years, what is the project's internal rate of return?
If you know that the project has a regular payback of 2.5 years, what is the initial cash outlay of the project?
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