Modern Refurbishing Inc.is considering a project that has the following cash flow data.What is the project's IRR? Note that a project's IRR can be less than the cost of capital (and even negative), in which case it will be rejected. $$\begin{array} { l c c c c c }
\text { Year } & 0 & 1 & 2 & 3 & 4 \
\hline \text { Cash flows } & - \$ 850 & \$ 300 & \$ 290 & \$ 280 & \$ 270
\end{array}$$
A) 13.13%
B) 14.44%
C) 15.89%
D) 17.48%
E) 19.22%

Question

Modern Refurbishing Inc.is considering a project that has the following cash flow data.What is the project's IRR? Note that a project's IRR can be less than the cost of capital (and even negative), in which case it will be rejected. $$\begin{array} { l c c c c c } 
\text { Year } & 0 & 1 & 2 & 3 & 4 \
\hline  \text { Cash flows } & - \$ 850 & \$ 300 & \$ 290 & \$ 280 & \$ 270
\end{array}$$
A) 13.13%
B) 14.44%
C) 15.89%
D) 17.48%
E) 19.22%

Quizplus · Accepted Answer

IRR is the discount rate that makes the NPV of a project equal to zero. In this case, the IRR is 13.13%.

Modern Refurbishing Inc A) 1313% B) 14

Modern Refurbishing Inc A) 1313%
B) 14