What is the IRR of a project that requires an initial cash outlay of $12,345 and is expected to generate cash flows of $3,600 a year for three years and then $4,200 a year for two more years? Assume the tax rate is zero.

Question

Quizplus · Accepted Answer

To calculate the IRR, we need to find the discount rate that makes the present value of the cash inflows equal to the initial cash outlay.

Using a financial calculator or Excel, we can find that the IRR of this project is 16.20%. Therefore, the best choice is C.

What Is the IRR of a Project That Requires an Initial