CMA Study Group

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  • 1.  need help in irr

    Posted 27 days ago
    A company is considering two investments. Both have an estimated useful life of 5 years and require an initial cash outflow of $15,000. The cash inflow for each project is shown below:

    Project A Project Z
    Year 1 $7,000 $ 0
    Year 2 8,000 5,000
    Year 3 9,000 5,000
    Year 4 0 5,000
    Year 5 0 25,000
    The company requires an 8% rate of return and uses straight-line depreciation. Which one of the following capital budgeting evaluation methods would result in an initial recommendation of the least profitable project as the better choice?

    A. Internal rate of return.
    Answer (A) is incorrect. Project Z's IRR of 27.1% is greater than Project A's IRR of 26.4%. This indicates that Project Z is the better projec

    here i want to get how he calculate the irr 27.1 and 26.4 

    [sameh] [sayed] [mahmoud]
    [senior accountant]
    [el manar group]
    [giza] [haram]