The Caffeine Coffee Company uses the modified internal rate of return. The firm
ID: 2768729 • Letter: T
Question
The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 8 percent. The project being analyzed is as follows ($36,000 investment): Use Appendix A and Appendix Bfor an approximate answer but calculate your final answer using the formula and financial calculator methods.
What is the modified internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
The Caffeine Coffee Company uses the modified internal rate of return. The firm has a cost of capital of 8 percent. The project being analyzed is as follows ($36,000 investment): Use Appendix A and Appendix Bfor an approximate answer but calculate your final answer using the formula and financial calculator methods.
Explanation / Answer
a. The internal rate of return (IRR) is calculated using the IRR formula in excel as in =IRR(cash_flow_range)
The below isas shown in the table:
IRR = 18.41%
Year Cash flow 0 -36000 1 19000 2 17000 3 13000 IRR 18.41%Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.