Rosalee Corp has a project with the following cash flows Cas

Rosalee Corp. has a project with the following cash flows: Cash Flow $ 35,200 26,800 29,200 Year 0 2 What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g. 32. If there is no real IRR, enter \'0\'.) Internal rate of return 0

Solution

Answer is 0

If you look at the cash flows of the project, they are unconventional in nature.

This implies, they started with a positive cash flow, turn negative next year and turn positive again in final year. This means polarity of cash flow changed twice (positive to negative first, negative to positive then). So, there will be two IRRs for this project.

This means there is no true IRR in the project. Hence the answer is \'0\'.