Shields Company has gathered the following data on a proposed investment project:

(Ignore income taxes in this problem.)
-The internal rate of return on the investment is closest to which of the following?

Question

Shields Company has gathered the following data on a proposed investment project:

(Ignore income taxes in this problem.)
-The internal rate of return on the investment is closest to which of the following?

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of the project equal to zero. In this case, we can use trial and error or a financial calculator to find the approximate IRR. Using trial and error, we can see that an IRR of 15% results in an NPV of approximately $0. Therefore, the answer is C) 15%.

Shields Company Has Gathered the Following Data on a Proposed