What is the internal rate of return for a project that has a net investment of $150,000 and net cash flows of $40,000 for 5 years?
A) between 10% and 11%
B) between 9% and 10%
C) between 11% and 12%
D) between 12% and 13%

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. For this project, the IRR falls between 10% and 11% because it is the range that typically corresponds to the given investment and cash flow figures, assuming a standard project life and cash flow pattern. Calculating the exact IRR requires iterative methods or financial calculators, but given the options, the range between 10% and 11% is the most plausible estimate based on the provided figures.

What Is the Internal Rate of Return for a Project