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

Quizplus · Accepted Answer

To calculate the IRR of the project, we need to find the discount rate that makes the net present value (NPV) of the cash flows equal to zero. Using a financial calculator or spreadsheet, we can find that the IRR of this project is 24.3%. Therefore, the correct answer is C).

Suppose a Project Costs $300 and Produces Cash ﬂOws of $100