Initial Outlay Cash Flow in Period The Internal Rate of Return (to nearest whole percent)is:
A) 10%.
B) 18%.
C) 20%.
D) 24%.

Question

Initial Outlay Cash Flow in Period  The Internal Rate of Return (to nearest whole percent)is:
A) 10%. 
B) 18%. 
C) 20%. 
D) 24%.

Quizplus · Accepted Answer

To calculate IRR, we need to find the discount rate that sets the net present value (NPV) of all cash flows to zero. Using the cash flows provided in the question, we can solve for IRR using a financial calculator or software. The IRR for this project is approximately 20%. Therefore, choice C is the correct answer.

Initial Outlay Cash Flow in Period the Internal Rate