Spence Company is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected.
$\begin{array} { l c c c c c }
\text { Year } & 0 & 1 & 2 & 3 & 4 \
\text { Cash flows } & - \$ 1,050 & 400 & 400 & \$ 400 & 400
\end{array}$

Question

Spence Company is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the cost of capital or negative, in both cases it will be rejected. 
$\begin{array} { l c c c c c } 
\text { Year } & 0 & 1 & 2 & 3 & 4 \
 \text { Cash flows } & - \$ 1,050 & 400 & 400 & \$ 400 & 400
\end{array}$

Quizplus · Accepted Answer

$\begin{array} { c c c c c c } 
\text { Year } & 0 & 1 & 2 & 3 & 4 \
\text { Cash flows }& - \$ 1,050 & \$ 400 & \$ 400 & \$ 400 & \$ 400
\end{array}$ 
IRR = 19.27%