Internal Rate of Return (IRR)

Exercise ID: tvm-real-010

Mode SwitchingUneven Cash Flows

Description

A project costs $50,000 today and generates $15,000, $20,000, and $25,000 over the next three years. Calculate the IRR.

Given Values

CF0

-50000

C01

15000

F01

C02

20000

F02

C03

25000

F03

Objective

Calculate IRR

Steps

Total 19 steps

Step 1:Open Cash Flow Worksheet

Key Sequence:

Before Key Press:

0.00

After Key Press:

CF0 0.00

⏱ 1000ms

Step 2:Clear Work (CF Data)

Key Sequence:

2ndCE_C

Before Key Press:

CF0 0.00

After Key Press:

CF0=0.00

⏱ 1500ms

Step 3:Input -50000

Key Sequence:

PLUS_MINUS50000

Before Key Press:

CF0=0.00

After Key Press:

-50000

⏱ 2200ms

Step 4:Enter CF0

Key Sequence:

ENTER

Before Key Press:

-50000

After Key Press:

CF0=-50000.00

⏱ 1000ms

Step 5:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

CF0=-50000.00

After Key Press:

C01 0.00

⏱ 800ms

Step 6:Input 15000

Key Sequence:

15000

Before Key Press:

C01 0.00

After Key Press:

15000

⏱ 2000ms

Step 7:Enter C01

Key Sequence:

ENTER

Before Key Press:

15000

After Key Press:

C01=15000.00

⏱ 1000ms

Step 8:Move to Frequency

Key Sequence:

DOWN

Before Key Press:

C01=15000.00

After Key Press:

F01 1.00

⏱ 800ms

Step 9:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

F01 1.00

After Key Press:

C02 0.00

⏱ 800ms

Step 10:Input 20000

Key Sequence:

20000

Before Key Press:

C02 0.00

After Key Press:

20000

⏱ 2000ms

Step 11:Enter C02

Key Sequence:

ENTER

Before Key Press:

20000

After Key Press:

C02=20000.00

⏱ 1000ms

Step 12:Move to Frequency

Key Sequence:

DOWN

Before Key Press:

C02=20000.00

After Key Press:

F02 1.00

⏱ 800ms

Step 13:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

F02 1.00

After Key Press:

C03 0.00

⏱ 800ms

Step 14:Input 25000

Key Sequence:

25000

Before Key Press:

C03 0.00

After Key Press:

25000

⏱ 2000ms

Step 15:Enter C03

Key Sequence:

ENTER

Before Key Press:

25000

After Key Press:

C03=25000.00

⏱ 1000ms

Step 16:Move to Frequency

Key Sequence:

DOWN

Before Key Press:

C03=25000.00

After Key Press:

F03 1.00

⏱ 800ms

Step 17:Next Cash Flow

Key Sequence:

DOWN

Before Key Press:

F03 1.00

After Key Press:

C04 0.00

⏱ 800ms

Step 18:Open IRR Worksheet

Key Sequence:

IRR

Before Key Press:

C04 0.00

After Key Press:

IRR 0.00

⏱ 1000ms

Step 19:Compute IRR

Key Sequence:

CPT

Before Key Press:

IRR 0.00

After Key Press:

IRR=9.73

⏱ 1500ms

Calculator Display

      0.00

Speed:← →

💡 Press Space to quickly pause/play

⚠️ Common Mistakes and Traps

1.Not entering CF0 as a negative number (Error 5)
2.Forgetting to clear previous CF data
3.Confusing NPV and IRR keys

(Expand the sections to view answers and common mistakes before printing.)

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