Homework Answers
Let the IRR be x.
Now , Present Value of Cash Outflows=Present Value of Cash Inflows
38500 = 5000/(1.0x) +5000/ (1.0x)^2 +5000/(1.0x)^3+..........+ 5000/(1.0x)^20
Or x= 11.52%
Hence the IRR is 11.52%
Answer: Rate of Return is 11.52%
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