--%>
Assignment Help - homework help

Calculation Of IRR

Calculation Of IRR: IRR is the rate at which your discounted cash inflow becomes equal to your discounted cash outflow. In other words NPV=0. To determine this following steps are followed:-

1. Determine cash inflow. This is equivalent to operating income after tax although before depreciation & amortization expenses.

2. Determine project investment in the beginning of the project life.

3. Select a discount rate which will discount cash inflow to reduce it .discounting is done in following method:
= Amount*(100/100+rate)N.
Here n is number of year of the amount being considered.

4. Incase discounted value is higher than the project cost than select a higher rate of discounting & if it is lower than select a lower discounting rate for the cash inflows of all periods

5. The IRR in the assignment is calculated  through this method

530_cal of IRR.jpg

   Related Questions in Financial Accounting

  • Q : Case study of harvesting a tree

    Recently, a friend accused her neighbor of harvesting a tree (sapling of balsam fir, Abies balsamea) from her land without permission. Her neighbor claims that he bought it from a Christmas tree plantation (growing in a clearing down the road).  Your friend says

    		•
  • Q : Hedging transaction exposure and money

    Compare and discuss the hedging transaction exposure by using the forward contract vs. money market instruments. When the optional hedging approaches do creates the same result?

    		•
  • Q : Credit Claims How to handle the Credit

    How to handle the Credit Claims?

    		•
  • Q : Restrictions of standard costing Write

    Write down the restrictions of standard costing?

    		•
  • Q : Money market Simply define and

    Simply define and illustrate the Money market?

    		•
  • Q : Case study of a pharmaceutical group in

    The XYZ Group, a supplier of pharmaceutical equipment, systems and services, has its head office in London and primary production facilities in the US. The company also has a successful subsidiary in South Africa, which was established in 1990. XYZ South Africa does n

    		•
  • Q : Types of fixed asset in accounting How

    How many kinds of fixed asset are there in accounting? What are they?

    		•
  • Q : Definition of Ledger What is the

    What is the Definition of Ledger in terms of Accountancy?

    		•
  • Q : Free-riding firms without tradable

    Explain how do firms with no tradable assets get free-ride from the firms whose securities are internationally tradable?

    		•
  • Q : Accounting Acquisition Entry and

    Acquisition Entry and Consolidation Working Paper On January 31, 2014, Phoenix, Inc. acquired all of the outstanding common stock of Spark Corporation for $400 million cash plus 25 million shares of Phoenix' $10 par value common stock having a market value of $90 per share. Registration fees were $

    		•