Suppose a project costs $300 and produces cash flows of $100 over each of the following six years. What is the IRR of the project?

A) There is not enough information; a discount rate is required
B) 10.0%
C) 24.3%
D) 34.9%
E) 38.1%

Question

Victor Flores · Accepted Answer

Final Answer : C, Explanation :  The IRR is the discount rate that makes the net present value (NPV) of the cash flows equal to zero. For this project, the IRR is approximately 24.3%.

Suppose a project costs $300 and produces cash flows of $100 over each of the following six years. What is the IRR of the project?

A) There is not enough information; a discount rate is required
B) 10.0%
C) 24.3%
D) 34.9%
E) 38.1%

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Learning Objectives

Related questions

Suppose a project costs $300 and produces cash flows of $100 over each of the following six years. What is the IRR of the project?A) There is not enough information; a discount rate is requiredB) 10.0%C) 24.3%D) 34.9%E) 38.1%

Definitions

Learning Objectives

Learning Objectives

Related questions

Suppose a project costs $300 and produces cash flows of $100 over each of the following six years. What is the IRR of the project?

A) There is not enough information; a discount rate is required
B) 10.0%
C) 24.3%
D) 34.9%
E) 38.1%