Econnect FINANCE r 9 Quiz Question 7 of 20 value 250 points

??? Econnect FINANCE r 9 Quiz Question 7 (of 20) value: 2.50 points Problem 9-10 Calculating IRR [LO5] What is the IRR of the following set of cash flows? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Year Cash Flow 0 $16,900 7,600 8,900 7,400 IRR References Worksheet Difficulty. Basic Problem 9-10 Calculating IRR LOS]

Solution

Now we find IRR using the following formula

IRR is calculated using trial and error method.

We will discount cashflows ate various rates to arrive at the IRR

First we discount at 15%

Discounting Factor (DCF)= (1+r)^-n

NPV should be 0 at IRR