A project has an initial cost of $20,000.00 and no another costs throughout the life of the project. Assuming the project has a PI of 1.23, the IRR is ____.

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The IRR (Internal Rate of Return) is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. The Profitability Index (PI) is calculated by dividing the present value of future cash flows by the initial investment. A PI greater than 1 indicates that the NPV is positive, which happens when the IRR is greater than the discount rate used to calculate the NPV. Therefore, if a project has a PI of 1.23, it means the project is expected to generate a return greater than the cost of capital (discount rate), implying the IRR is greater than the discount rate.

A Project Has an Initial Cost of $20,000