## Quiz 19 :

Investment Decisions: Npv and Irr

Answer:

B. is the value now of all net benefits that are expected to be received in the future.

d. is also correct.

Answer:

IRR (Internal Rate of Return) of project is the rate at which the NPV (Net Present Value) of project becomes zero.. It is simple to apply. The project which has IRR greater than its required rate of return should be accepted.

The IRR can be computed using the "IRR" function of spreadsheet

Compute the "IRR" using the spreadsheet. Enter given values and formula in the spreadsheet as shown in the image below.

Obtained result is provided below.

Thus, the internal rate of return is

.

Therefore, the correct answer is

.

Answer:

a. IRR = 21.88 percent

b. NPV = 173,732