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Category > Management Posted 22 Dec 2017 My Price 10.00

finding The internal rate of return

Need assistance with finding The internal rate of return is between what two whole discount rate.  (e.g., between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)?  See my attachment.  I am getting 22.03% in cell I31 and connect states that is incorrect.  Can anyone help with this formula?

 

 

 

Chapter 8: Applying Excel Data Example C Cost of equipment needed $783,000 Working capital needed $140,000 Overhaul of equipment in 13 years $20,000 Salvage value of the equipment in 18 years $25,000 Annual revenues and costs: Sales revenues $430,000 Cost of goods sold $225,000 computation of IRR Out-of-pocket operating costs $60,000 0 -$643,000 Discount rate 0.16 1 $ 145,000 2 $ 145,000 Enter a formula into each of the cells marked with a ? below 3 $ 145,000 Exhibit 8-4 4 $ 145,000 5 $ 145,000 Sales revenues $ 430,000 6 $ 145,000 Less cost of goods sold $225,000 7 $ 145,000 Less out-of-pocket costs $60,000 8 $ 145,000 Annual net cash inflows $ 145,000 9 $ 145,000 10 $ 145,000 Amount of 16% Present Value 11 $ 145,000 Year(s) Cash Flow Factor* of Cash Flows 12 $ 145,000 Purchase of equipment Now -$783,000 1.000 $ (783,000) 13 $ 125,000 Working capital needed Now -$140,000 1.000 (140,000) 14 $ 145,000 Overhaul of equipment 13 -$20,000 0.145 (2,905) 15 $ 145,000 Annual net cash inflows from sales of the product line 1- 18 $ 145,000 5.818 843,588 16 $ 145,000 Salvage value of equipment 18 $ 25,000 0.069 1,729 17 $ 145,000 Working capital released 18 $ 140,000 0.069 9,680 18 $ 310,000 Net present value $ (70,908) irr 22.03% *Use the formulas from Appendix 8B: Present value of $1 = 1/(1+r)^n Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) where n is the number of years and r is the discount rate
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CourseLover
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Status NEW Posted 22 Dec 2017 03:12 PM My Price 10.00

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