Assume that an initial investment is $100,000 and that the estimated annual cash flows for the next 5 years are $25,000. What is the internal rate of return (IRR) for this investment?

Question

Quizplus · Accepted Answer

The IRR is the discount rate that makes the net present value (NPV) of the cash flows equal to zero. For an investment of $100,000 with annual cash flows of $25,000 for 5 years, the IRR is approximately 8%.

Assume That an Initial Investment Is $100,000 and That the Estimated