Question

19. An investment costs $290,000 and will generate the following cash flows: Year 1 - +$132,000; Year 2 - +$100,000; Year 3 - +$150,000. The required rate of return is 15%. What is the IRR?

Answer 1

14.80%

Step-by-step explanation:

Calculation of the IRR using a financial calculator is as follows :

($290,000) CFj

+$132,000 Cfj

+$100,000 Cfj

+$150,000 Cfj

Shift IRR/YR 14.80%

Therefore, the IRR is 14.80%.