00:01
Hello students, here is a question.
00:02
An investment with an initial cost of $4 ,000, reduce our cash flow of $3 ,400 and minus $500, $2 ,800 and minus $100 and $6 ,000 for an year 1 to 5 respectively.
00:17
How many irrs does this project have? so, this is our question.
00:23
So, we have a cash information given in the question and the number of years will be fine.
00:27
So, using the sign changes, we can estimate the number of irr of a project.
00:32
Using the sign changes, we can find the irr that is from year 0 to year 1.
00:43
The negative and positives change we have.
00:46
So, that is minus $4 ,000 to $3 ,400 and then from year 1 to 2.
01:01
So, year 1 to 2, we have plus $3 ,400 to minus $500 and then from year 2 to 3, year 2 to 3, it will be minus $500 to plus $2 ,800 and from year 3 to 4, it has positive signs to a negative sign change.
01:29
So, it could be, it will be plus $2 ,800 to minus $100 and then the year 4 to 5, it is negative...