An investment that provides annual cash flows of $20,100 for 8 years costs $87,500 today. At what rate would you be indifferent between accepting the investment and rejecting it?
A) 17.60 percent
B) 15.90 percent
C) 15.51 percent
D) 15.93 percent
E) 16.74 percent

Question

Quizplus · Accepted Answer

The correct answer is D because the NPV of the investment is $0 at a rate of 15.93%.

An Investment That Provides Annual Cash Flows of $20,100 for 8