Calculate the IRR for the picture below16.80% is incorrect A venture requires an immediate investment of $500,000 and anadditional investment of $200,000 three years from now. It willgenerate annual profits of $150,000 for seven years.YearYearYearYearYearYearYearToday123457++$150,000 $150,000 $150,000 $150,000 $150,000 $150.00O+++$150.000Assistance$500,000$200,000Financial calculator diagramCF2ND CLR WORKCalculate the IRR for this ventureCFo = 500,000 (+/-)C01 = 150,000FO1 = 2

Internal Rate of Return(IRR) is the financial analysis tool used for the estimation of profitability…

Answered: Year Year Year Year Year Year Year…

Year Year Year Year Year Year Year Today 1 2 3 4 5 6 7 + $150,000 $150,000 $150,000 $150,000 $150,000 $150.00o + $150.000 Assistance $500,000 $200,000 Financial calculator diagram

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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Question

100%

Calculate the IRR for the picture below

16.80% is incorrect

A venture requires an immediate investment of $500,000 and an
additional investment of $200,000 three years from now. It will
generate annual profits of $150,000 for seven years.
Year
Year
Year
Year
Year
Year
Year
Today
1
2
3
4
5
7
+
+
$150,000 $150,000 $150,000 $150,000 $150,000 $150.00O
+
+
+
$150.000
Assistance
$500,000
$200,000
Financial calculator diagram
CF
2ND CLR WORK
Calculate the IRR for this venture
CFo = 500,000 (+/-)
C01 = 150,000
FO1 = 2

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