Compute the IRR static for Project E The appropriate cost of

Compute the IRR static for Project E. The appropriate cost of capital is 7 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project E Time: 0 1 2 3 4 5 Cash flow –$2,800 $870 $870 $780 $560 $360

Solution

Year Withdrawal Future Value at 8.42% 2013 -$2,80000 -$4,19528 2014 $87OE00 $1,20227 2015 $87000 $1,10887 2016 $78000 $91OE93 2017 $56000 $607i7 2018 $36000 $36OE00 Totals: $640.00 -$0.04 According to calculations, in order to achieve the entered cash flow schedule the average annual rate of return would be 8.42%. The following chart shows the future value of each cash flow using this calculated rate of return