The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $400,000. The Sisyphean Company expects cash inflows from this project as detailed below:

The appropriate discount rate for this project is 15%. The internal rate of return (IRR) for this project is closest to ________.
A) 13%
B) 16%
C) 21%
D) 24%

Question

The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $400,000. The Sisyphean Company expects cash inflows from this project as detailed below:

The appropriate discount rate for this project is 15%. The internal rate of return (IRR) for this project is closest to ________.
A) 13% 
B) 16% 
C) 21% 
D) 24%

Quizplus · Accepted Answer

C) CF0 = -400,000
CF1 = 157,452.975
CF2 = 157,452.975
CF3 = 157,452.975
CF4 = 157,452.975
Compute IRR = 21%.

The Sisyphean Company Is Planning on Investing in a New