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Sagot :
Using a financial calculator, the IRR may be found to be 12%. The calculations for NPV and IRR use the same formula.
What is the Internal rate ratio?
Financial analysts use the statistic known as the internal rate of return (IRR) to evaluate the profitability of potential investments. In a discounted cash flow analysis, the IRR is the discount rate that reduces all cash streams' net present values (NPV) to zero.
Keep in mind that the IRR does not accurately reflect the project's true financial value. When utilizing the IRR tool in Excel, calculating the IRR is easy. Excel does all the necessary work and calculates the specified discount rate for you.
Cash flows of the project
Cash flow in year 0 = $-7,200,000
Cash flow in year 1 = $8,000,000 - $6,000,000 = $2 million
Cash flow in year 2 = $8,000,000 - $6,000,000 = $2 million
Cash flow in year 3 = $8,000,000 - $6,000,000 = $2 million
Cash flow in year 4 = $8,000,000 - $6,000,000 = $2 million
Cash flow in year 5 = $8,000,000 - $6,000,000 = $2 million
Using a financial calculator, the IRR may be found to be 12%.
To know more about the Internal rate ratio: https://brainly.com/question/28581735
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