$290$290$290$290$290i.12345End of Year$1,050$290 $290 $290 $290 $2904ii.56789End of Year$1,050$1,740 $1,740 $1.740 S1,740 $1,7404ii.56789End of Year$6,300 a. Calculate the IRR for each of the three cash-flow diagrams that follow. Use EOY zero for (i) and EOY four for (ii) and (ii) as the reference points in time. What canyou conclude about "reference year shift" and "proportionality" issues of the IRR method?

IRR: It is the rate that makes the project's net present value equal to zero. Therefore, the value…

Answered: . Calculate the IRR for each of the…

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. Calculate the IRR for each of the three cash-flow diagrams that follow. U

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter10: Valuing Early-stage Ventures

Section: Chapter Questions

Problem 17DQ

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Question

$290
$290
$290
$290
$290
i.
1
2
3
4
5
End of Year
$1,050
$290 $290 $290 $290 $290
4
ii.
5
6
7
8
9
End of Year
$1,050
$1,740 $1,740 $1.740 S1,740 $1,740
4
ii.
5
6
7
8
9
End of Year
$6,300

a. Calculate the IRR for each of the three cash-flow diagrams that follow. Use EOY zero for (i) and EOY four for (ii) and (ii) as the reference points in time. What can
you conclude about "reference year shift" and "proportionality" issues of the IRR method?

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