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Investment 1 2 3 4 Sum of Cashflows A - $75,000 $20,000 $25,000 $30,000 $50,000 $125,000 B - $75,000 $15,000 $20,000 $35,000 $55,000 $125,000

This document shows the cash flows and internal rate of return (IRR) for two investment options, A and B. Investment A had negative cash flows of $75,000 in years 0 and 1, and positive cash flows of $20,000, $25,000, $30,000, and $50,000 in years 1 through 4, resulting in an IRR of 20%. Investment B had the same cash flows as Investment A except for year 3, which was $35,000, resulting in a lower IRR of 19%.

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Djy Duhamy
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29 views

Investment 1 2 3 4 Sum of Cashflows A - $75,000 $20,000 $25,000 $30,000 $50,000 $125,000 B - $75,000 $15,000 $20,000 $35,000 $55,000 $125,000

This document shows the cash flows and internal rate of return (IRR) for two investment options, A and B. Investment A had negative cash flows of $75,000 in years 0 and 1, and positive cash flows of $20,000, $25,000, $30,000, and $50,000 in years 1 through 4, resulting in an IRR of 20%. Investment B had the same cash flows as Investment A except for year 3, which was $35,000, resulting in a lower IRR of 19%.

Uploaded by

Djy Duhamy
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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A

Investment
-$75,000
-$75,000

1
$20,000
$15,000

2
$25,000
$20,000

3
$30,000
$35,000

4
Sum of Cashflows
$50,000
$125,000
$55,000
$125,000

IRR
20% **
19%

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