Use the following information to answer the following question.
Below are the expected after-tax cash flows for Projects Y and Z.Both projects have an initial cash outlay of $20,000 and a required rate of return of 17%.
Project Y Project Z

-You are considering investing in a project with the following year-end after-tax cash flows: Year 1: $5000
Year 2: $3200
Year 3: $7800
If the initial outlay for the project is $12 113, calculate the project's IRR.
A)14%
B)10%
C)32%
D)24%

Question

Use the following information to answer the following question.
Below are the expected after-tax cash flows for Projects Y and Z.Both projects have an initial cash outlay of $20,000 and a required rate of return of 17%.
Project Y Project Z
 
-You are considering investing in a project with the following year-end after-tax cash flows: Year 1: $5000
Year 2: $3200
Year 3: $7800
If the initial outlay for the project is $12 113, calculate the project's IRR.
A)14% 
B)10% 
C)32% 
D)24%

Quizplus · Accepted Answer

The IRR is the discount rate that makes the net present value (NPV) of the cash flows equal to zero. Calculating the IRR for these cash flows results in approximately 14%.

Use the Following Information to Answer the Following Question