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    Internal rate of return

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    Please provide the solution to the following problem in an Excel spreadsheet.

    Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It expects the project to generate cash flows of zero in the first year and $1,000,000, $3,000,000, $8,000,000, $18,000,000 and $20,000,000 over years two, three, four, five and six. The cost of capital is 12 percent. What is the payback period for this project? What is the net present value of this project? What is the internal rate of return that Turnbull can earn on this project?

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    Solution Preview

    Please see the attachment.

    Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It
    expects the project to generate cash flows of zero in the first year and $1,000,000,
    $3,000,000, $8,000,000, $18,000,000 and $20,000,000 over years two, three, four, five
    and six. The cost of capital is 12 percent. What is the payback period ...

    Solution Summary

    The solution explains how to determine the internal rate of return of the project. The solution is provided in an Excel spreadsheet.

    $2.49

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