# Calculation of Integrated Multiple IRRs

Question

IRRs Froogle Enterprises is evaluating an unusual investment project. What makes the project unusual is the stream of cash inflows and outflows shown in the following table:

Year       Cash flow
0         \$ 200,000
1            920,000
2         1,582,000
3         1,205,200
4            343,200

a. Why is it difficult to calculate the payback period for this project?
b. Calculate the investment’s net present value at each of the following discount rates: 0%, 5%, 10%, 15%, 20%, 25%, 30% and 35%.
c. What does your answer to part b tell you about this project’s IRR?
d. Should Froogle invest in this project if its cost of capital is 5%? What if the cost of capital is 15%?
e. In general, when faced with a project like this, how should a firm decide whether to invest in the project or reject it?

Summary

The question is about Integrated multiple IRRs. A company named Froogle is evaluating options of investment. One of the projects is taken and it is evaluated for certain criteria such as calculation of payback period, net present value, cost of capital, etc.

Total Word Count NA

### Comments

• Rasha

this is a very good website

• maani

I have 50 questions for the same test your page is showing only 28

• joeanne

hi can you please help or guide me to answer my assignments. thanks

• joeanne

hi can anyone help or guide me to my assignments. thanks

• Monik

• Cristina

This solution is perfect ...thanks

• Janete

Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

• Sandeep

Perfect bank of solution.

• Oxana

great !

• Paul Brandon-Fritzius

thanks for the quick response. the solution looks good. :)

• tina Johnson

thnx for the answer. it was perfect. just the way i wanted it.

• Giuseppe

works fine.