Question

What is the internal rate of return (IRR) of a project that has the following cash...

What is the internal rate of return (IRR) of a project that has the following cash flows? The required return is 10.0%.

Year Cash Flow
0 $ (12,000)
1 $ 3,000
2 $ 3,000
3 $ 3,000
4 $ 3,000
5 $ 3,000
6 $ 3,000

Group of answer choices

None of these are correct.

12.98%

10.19%

14.55%

7.69%

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Answer #1

IRR is the rate at which NPV = 0,

12,000 = ct/(1+IRR) t=1

IRR = 12.98%

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