NPV= PV of cash flow – initial investment
= annual cash flow x PVIFA(n,R) – initial investment
= 3000 x PVIFA (5,15.2382%) – 10,000
= 3,000 x 3.33333 -10,000
= 0
So NPV is 0.
IRR is the discount rate at which NPV is zero. We are getting NPV zero at discount rate 15.2382% Therefore, IRR of this project would be 15.2382%.
