| Finance help - question about Internal Rate of Return
I'm trying to calculate IRR on a lease and i'm not getting the answer i'm expecting. Am I doing something wrong here?
details:
- lease payments of 5800 paid at beginning of each year
- 8 year lease term
- buy out option at end of lease term = residual value = 5500
- machine cost if purchasing is 33,800 from the dealer
cfo = -33800
cf1 to cf 7 = 5800
cf 8 = -300
IRR = -.08%
The IRR of -.08% does not sound right. see any obvious mistakes?
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