CFROI. IRR and Weighted Average Return

[ccchiller]

Hello dear fellows,

I am trying to solve this task. Perhaps you can help me with it.

There is an investment of $60 and $10. The project lasts for 4 years and earns 20 per year. At the end the $60 investment is depreciated away and 10$ investment stays at the same value.
Calculate the IRR for this project.
Using excel i you get 10%. So far good.

Now suppose that we make the same kind of investment in each of these 4 years. So, after the fourth layer of investment the business will have one project starting its last year of life and one project starting its first year of life. Calculate the weighted average return (CFROI) of the business. I am quite confused here. Hope you can help me with it.
Kind regards,
ccchiller.

 

[Denis]

There is an investment of $60 and $10. The project lasts for 4 years and earns 20 per year. At the end the $60 investment is depreciated away and 10$ investment stays at the same value.

Huh? Can you rewrite that in a way that makes sense? Thank you.

 

[ccchiller]

You make $60 investment in machinery. They last for 4 years as well, so at the end of the project they have no value. For the other 10$ you buy some tools, that still have 10$ value at the end of the project.

Thanks.