Answer to Question #144420 in Finance for Bria

Question

Question 2
Juanita has an opportunity to invest in her friend's clothing store. The initial investment is $10,200 and the expected annual cashflows thereafter are {$300; $700; $1,300; $2,000; $2,000; $5,000; $5,000}. What is Juanita's IRR on this investment? (Allow two decimals in the percentage but do not enter the % sign.)

Answer 1

The given information can be entered in the table as shown below.

IRR lies between 9$\%$ and 10$\%$ . By simple interpolation IRR = $9$$\%$$+$$1$$\%$$\times$$\frac{101}{376+101} = 9.21$