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Computation of NPV: Assignment #01
Computation of NPV: Assignment #01
YEAR 0 1 2 3 4 5
CASH FLOW -50000 15000 15000 20000 10000 5000
Computation of NPV
Computation of IRR
By Assuming Lower rate of return as 10% and Higher rate of return is 15%.
IRR = a+ A (b-a)
A-B
IRR=10+ 975 ×(15-10)
975-(4290)
IRR=10+ 975 ×5
5265
IRR=10+0.185 ×5
IRR=10+0.925
IRR=10.925%