Simkins Renovations Inc. is considering a project that has the following cash fl

Question

Simkins Renovations Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC (and even negative), in which case it will be rejected. Include formula.
Year 0 1 2 3 4 Cash flows -$500 $300 $290 $280 $270





Answer a. 53.16% b. 54.06% c. 41.10% d. 46.46% e. 44.68% Simkins Renovations Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC (and even negative), in which case it will be rejected. Include formula.
Year 0 1 2 3 4 Cash flows -$500 $300 $290 $280 $270





Year 0 1 2 3 4 Cash flows -$500 $300 $290 $280 $270 53.16% 54.06% 41.10% 46.46% 44.68% Year 0 1 2 3 4 Cash flows -$500 $300 $290 $280 $270

Explanation / Answer

Let IRR be r

e 44.68%

$500= $300/(1+r)+ $290/(1+r)^2 + $280/(1+r)^3 + $270/(1+r)^4
r

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