Asked by
Manisha Patel
on Nov 28, 2024
Verified
Rentz Recreation Inc.is considering a project that has the following cash flow data.What is the project's IRR? Year: Cash flows: 01234−$650$250$230$210$190\begin{array}{l}\begin{array}{l}\text { Year: } \\\text { Cash flows: }\end{array}\begin{array}{cccc}0 & 1 & 2 & 3 & 4 \\\hline-\$ 650 & \$ 250 & \$ 230 & \$ 210 & \$ 190\end{array}\end{array} Year: Cash flows: 0−$6501$2502$2303$2104$190
A) 14.04%
B) 15.44%
C) 16.99%
D) 18.69%
IRR
Internal Rate of Return, a financial metric used to estimate the profitability of potential investments.
Cash Flow
The total amount of money being transferred in and out of a business, particularly in handling its operational activities and investments.
Project
An organized collection of connected tasks designed to be carried out within a specified timeframe and under predefined cost and constraints.
- Gain insight into the application of Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR) as methodologies for project analysis.
Verified Answer
TP
Learning Objectives
- Gain insight into the application of Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR) as methodologies for project analysis.