Suppose Your Friend Sarah Came to See You with an Opportunity

Suppose your friend Sarah came to see you with an opportunity to invest in a project that generates $5,000 in the first and the third year,and where the cash flow in the second year is $3,000.The initial investment required for the project is $10,000.If the risk-adjusted rate is 15%,she insists that the project is worth the investment.Which method is Sarah using?

A) Internal rate of return
B) Payback period
C) Net present value
D) Profitability index