A 25- year project has a cost of $1,500,000 and has annual cash ﬂows of $400,000 in years 1-15, and $200,000 in years 16-25. The company's required rate is 14%. Given this information, calculate
The IRR of the project.
A) 30.25%
B) 28.28%
C) 26.22%
D) 24.25%
E) 22.25%

Question

Quizplus · Accepted Answer

The IRR is the discount rate that makes the net present value (NPV) of the cash flows equal to zero. By calculating the IRR using the given cash flows and costs, it is found to be approximately 26.22%.

A 25- Year Project Has a Cost of $1,500,000 and Has