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Is this IRR correct?


i'm asking; do i use the operating cash flow? and the total investment to start is 200k that include the doodads but do i also count fixed cost toward the 200k in when doing the IRR equation. so far i've done this much
0=-200k +(99730/1.409)...(99730/1.409*5)

the IRR given in the textbook is 40.9%

constant cash flow of 99730 for 5 years
initial investment of 200k at the beginning. zero salvage value

fixed cost of 45k each year(i don't think that's relevant since is the net working capital and is consider when doing the cash flow)
the NPV is 159504 and the required return is 12%

I also calculate an IRR of 40.9% without including the 45,000 fixed costs. Remember that there is no algorythm for IRR calculation, so the value must be found by trial and error (or, much more conveniently, by Excel's RATE function).

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