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Homework answers / question archive / What is the first period cash flow for the following project if its initial cash flow is -$4,500,000 and it is expected to provide operating cash flows of $750,000 in year 2 and $3,000,000 in year 3 with an IRR of 10%? answer choices $842,727

What is the first period cash flow for the following project if its initial cash flow is -$4,500,000 and it is expected to provide operating cash flows of $750,000 in year 2 and $3,000,000 in year 3 with an IRR of 10%? answer choices $842,727

Finance

What is the first period cash flow for the following project if its initial cash flow is -$4,500,000 and it is expected to provide operating cash flows of $750,000 in year 2 and $3,000,000 in year 3 with an IRR of 10%?

answer choices

$842,727.27

$1,788,842.98

$162,622.09

$1,472,727.27

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IRR is the rate at which NPV=0

[X/(1+10%)]+[750000/(1+10%)^2)]+[3000000/(1+10%)^3)]=4500000

[X/1.1]+619834.71+2253944.40=4500000

X/1.1=4500000-2873779.11=1626220.89

X=1626220.89*1.1=1788842.98

Option b is correct

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