Thorley Inc. is considering a project that has the following cash flow data. Wha
ID: 2707891 • Letter: T
Question
Thorley Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the WACC or negative, in both cases it will be rejected.
Year 0 1 2 3 4 5
Cash flows -$1,075 $325 $325 $325 $325 $325
Thorley Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the WACC or negative, in both cases it will be rejected.Explanation / Answer
-$1,075= 325/(1+irr) + 325/(1+irr)^2 + 325/(1+irr)^3 + 325/(1+irr)^4+325/(1+irr)^5
15.566%