Jerry Hall invested in a project that required an initial amount of $52,160, and returned cash inflows of $10,000 per year for 10 years.A partial table of the present value of an annuity of $1 in arrears is as follows:
What is the internal rate of return for this investment?

Question

Jerry Hall invested in a project that required an initial amount of $52,160, and returned cash inflows of $10,000 per year for 10 years.A partial table of the present value of an annuity of $1 in arrears is as follows:
 What is the internal rate of return for this investment?

Quizplus · Accepted Answer

Discount factor = $52,160 / $10,000 = 5.216
This discount factor matches the one for an internal rate of return of 14%.

Jerry Hall Invested in a Project That Required an Initial