Hi guys,
I'm trying to solve for <abbr title="internal rate of return" style="box-sizing: border-box; border-bottom: none transparent; cursor: pointer; text-decoration-line: none; text-decoration-style: initial;">IRR</abbr> (let's say 20%) based irregular cash flows - essentially trying to find out what cash is required to arrive at an <abbr title="internal rate of return" style="box-sizing: border-box; border-bottom: none transparent; cursor: pointer; text-decoration-line: none; text-decoration-style: initial;">IRR</abbr> of 20%. So at year-0, the sponsor contributes $100 of cash in a 10-year project, I know for sure at year-1 the project will generate no cash. Then between years 2-5, the project generates $5 of cash annually. Between years 6-7, the project generates $10 of cash.
My question is, how do I find out the amount of project cash flows required in the last three years (years 8-10) to give the sponsor a 20% IRR? Thanks for your help!
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I'm trying to solve for <abbr title="internal rate of return" style="box-sizing: border-box; border-bottom: none transparent; cursor: pointer; text-decoration-line: none; text-decoration-style: initial;">IRR</abbr> (let's say 20%) based irregular cash flows - essentially trying to find out what cash is required to arrive at an <abbr title="internal rate of return" style="box-sizing: border-box; border-bottom: none transparent; cursor: pointer; text-decoration-line: none; text-decoration-style: initial;">IRR</abbr> of 20%. So at year-0, the sponsor contributes $100 of cash in a 10-year project, I know for sure at year-1 the project will generate no cash. Then between years 2-5, the project generates $5 of cash annually. Between years 6-7, the project generates $10 of cash.
My question is, how do I find out the amount of project cash flows required in the last three years (years 8-10) to give the sponsor a 20% IRR? Thanks for your help!
yr-0 | yr-1 | yr-2 | yr-3 | yr-4 | yr-5 | yr-6 | yr-7 | yr-8 | yr-9 | yr-10 |
($100) | $0 | $5 | $5 | $5 | $5 | $10 | $10 | ? | ? | ? |
Target IRR = 20% |
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