Internal rate of return: Western Gold Property Development Company is refurbishing a 200-unit condominium complex at a cost of $1,875,000. It expects that this will lead to expected annual cash flows of $415,350 for the next seven years. What internal rate of return can the company earn from this project? (Round to the nearest percent.)

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of the cash flows equal to zero. By calculating the IRR for the given cash flows, it is approximately 12%.

Internal Rate of Return: Western Gold Property Development Company Is