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Payback Period, NPV and IRR

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Using the information below, calculate the payback period and the NPV. Cost of capital 13%. Initial investment $100,000.

Cash Inflow 1 15,000
Cash inflow 2 20,000
Cash inflow 3 30,000
Cash inflow 4 35,000
Cash inflow 5 40,000

Is the IRR closest to:
a. 3.5%
b. 5.5%
c. 10.5%
d. 20.5%

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Solution Summary

Excel spreadsheet shows how to find the payback period an NPV when given cost of capital, initial investment and other data, as well as IRR.

Solution provided by:
Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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