Question: This question will require you to use Excel's IRR function. A firm invests $200,000 in a project today. It receives $20,000 a year from now,

This question will require you to use Excel's IRR function. A firm invests $200,000 in a project today. It receives $20,000 a year from now, $50,000 two years from now, and $195,000 three years from now and nothing more. What is the IRR of the project?

The format of Excel's IRR function is =IRR(aX:aY,Z)

Where aX:aY are cells aX to aY which have cash flows entered into them. The initial investment is a negative cash flow so it should have a negative sign.

Z is a "guess" IRR, usually you can set to 0.1 (which is 10%).

Answer should be a number given as a %. That is, for example 3.18% should be answered as 3.18 rather than 3.18% or 0.0318

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