Flynn,Inc.is considering a four-year project that has an initial outlay or cost of $80,000.The future cash inflows from its project are $40,000,$40,000,$30,000,and $30,000 for years 1,2,3 and 4,respectively.Flynn uses the internal rate of return method to evaluate projects.What is the approximate IRR for this project?
A)The IRR is less than 12%.
B)The IRR is between 12% and 20%.
C)The IRR is about 24.55%.
D)The IRR is about 28.89%.

Question

Quizplus · Accepted Answer

Using a financial calculator or spreadsheet, the IRR for this project is approximately 28.89%. Therefore, the answer is D.

Flynn,IncIs Considering a Four-Year Project That Has an Initial Outlay