The Dry Dock is considering a project with an initial cost of $107,400 and cash inflows for Years 1 to 3 of $37,200, $54,600, and $46,900, respectively. What is the IRR?
A) 12.62 percent
B) 13.41 percent
C) 14.48 percent
D) 13.22 percent
E) 14.56 percent

Question

Quizplus · Accepted Answer

Using a financial calculator or Excel, the IRR can be found to be 13.41 percent. This exceeds the required rate of return for the project, making it a favorable investment. Therefore, the best choice is B.

The Dry Dock Is Considering a Project with an Initial