Question: The following cash-flow pattern has two IRRs. Use Excel to draw a graph of the NPV of these cash flows as a function of the

The following cash-flow pattern has two IRRs. Use Excel to draw a graph of the NPV of these cash flows as a function of the discount rate. Then use the IRR function to identify the two IRRs. Would you invest in this project if the opportunity cost were 20%?


A
B
4
Year
Cash flow
5
0
-500
6
1
600
7
2
300
8
3
300
9
4
200
10
5
-1,000

Step by Step Solution

3.44 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Answ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!