Question

Juanita has an apportunity to invest in her friend clothing store.the initial investment is $10,200 and the expected annual cash flow thereafter are ($300,$700,$1,300, $2000,$5000,$5000) . What is Juanita IRR on this investment?

Answer 1

IRR lies between 9$\%$ and 10$\%$ . By simple interpolation IRR = $9$ $\%$ $+$ $1$ $\%$ $\times$$\frac{101}{376+101} = 9.21\%$