Business, 30.11.2020 04:10 Averybeam300

Blinding Light Co. has a project available with the following cash flows: Year Cash Flow 0 −$35,070 1 7,970 2 9,570 3 13,560 4 15,610 5 10,340 What is the project's IRR?

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Answer from: helpmelol37

The project's IRR is 17.28%

Explanation:

IRR is the discount rate at which the NPV of the project's cash flow becomes zero. ThNPV calculated using discount rate below IRR is positive and over IRR is negative.

To calculate the IRR using the following formula

IRR = Lower Rate + ( Lower rate NPV / ( Lower rate NPV - Higher rate NPV ) ) x ( Higher rate - Lower rate )

Now calculate the NPV two different rates

NPV at 17%

Year___Cash Flows__Preser value factor 17%__Present value

0($35,070)___( 1 + 17%)^-0 = 1 ($35,070)

1$7,970 ( 1 + 17%)^-1 = 0.8547 $6,812

2$9,570( 1 + 17%)^-2 = 0.7305 $6,991

3$13,560___ ( 1 + 17%)^-3 = 0.6244 $8,466

4$15,610( 1 + 17%)^-4 = 0.5337 $8,330

5$10,340( 1 + 17%)^-5 = 0.4561 $4,716

NPV $246

NPV at 18%

Year___Cash Flows__Preser value factor 18%__Present value

0($35,070)___( 1 + 18%)^-0 = 1 ($35,070)

1$7,970 ( 1 + 18%)^-1 = 0.8475 $6,754.24

2$9,570( 1 + 18%)^-2 = 0.7182 $6,873.03

3$13,560___ ( 1 + 18%)^-3 = 0.6086 $8,253.04

4$15,610( 1 + 18%)^-4 = 0.5158 $8,051.46

5$10,340( 1 + 18%)^-5 = 0.4371 $4,519.71

NPV ($618.52 )

Nox place the values in the formula

IRR = 17% + ( ( $246 / ( $246 - ( - 618.52 ) ) ) x ( 18% - 17% )

IRR = 17.28%

Answer from: Quest

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.

Answer from: Quest

E. all of the above

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Blinding Light Co. has a project available with the following cash flows: Year Cash Flow 0 −$35,070...

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