Chapter 4 Capital Budgeting and Basic Investment Appraisal ...

The diagram below shows the IRR as estimated by the formula. 2.5.4 EXAMPLE 5 A potential project’s predicted cash flows give a NPV of $50,000 at a discount rate of 10% and – $10,000 at a rate of 15%. Calculate the IRR. Solution: ... A Net present value. B Internal rate of return. ................
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