Internal Rate of Return of Project B (expressed to two decimal places ) using discount 
rates of 17% and 18% only. Your answer must include two net present value calculations 
and the determination of the IRR.

To calculate the **Internal Rate of Return (IRR)** of Project B using the discount rates of 17% and 18%, we'll go through the following steps:

### Step 1: Net Present Value (NPV) Calculation
We first calculate the **Net Present Value (NPV)** of the project at both 17% and 18%. The general formula for NPV is:

\[
\text{NPV} = \sum \left( \frac{C_t}{(1 + r)^t} \right) - I
\]

Where:
- \( C_t \) = Cash flow at time \( t \)
- \( r \) = Discount rate (17% or 18%)
- \( I \) = Initial investment
- \( t \) = Time period (year)

### Step 2: Formula for IRR
The **Internal Rate of Return (IRR)** is the discount rate that makes the NPV equal to zero:

\[
\text{NPV} = 0
\]

Since we do not have the exact cash flows provided in your question, the next steps would be to:
- Compute the **NPV at 17%** (let's call it \( \text{NPV}_{17} \)).
- Compute the **NPV at 18%** (let's call it \( \text{NPV}_{18} \)).

### Step 3: IRR Interpolation Formula
The IRR is found using linear interpolation between the two NPVs:

\[
\text{IRR} = r_1 + \left( \frac{\text{NPV}_1}{\text{NPV}_1 - \text{NPV}_2} \right) (r_2 - r_1)
\]

Where:
- \( r_1 \) = Lower discount rate (17%)
- \( r_2 \) = Higher discount rate (18%)
- \( \text{NPV}_1 \) = NPV at 17%
- \( \text{NPV}_2 \) = NPV at 18%

### Example Calculation
If you provide the initial investment and cash flows for Project B, I can walk through this calculation step by step with specific numbers.

Would you like to provide that information, or shall I explain how to apply the formula generally?

---

1. How does NPV differ from IRR in evaluating investments?
2. What assumptions are inherent in using IRR for project valuation?
3. How do changes in cash flows affect the NPV at different discount rates?
4. Could a project have more than one IRR? Why?
5. How is the NPV profile used in conjunction with IRR?

**Tip**: If NPV changes signs more than once over time, multiple IRRs may exist for a project.

Internal Rate of Return of Project B (expressed to two decimal places) using discount rates of 17% and 18% only. Your answer must include two net present value calculations and the determination of the IRR.

Learn how to calculate the Internal Rate of Return (IRR) for Project B using the discount rates of 17% and 18%. This tutorial covers the Net Present Value (NPV) formula and IRR interpolation method with step-by-step guidance. Suitable for college-level finance and accounting students.

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