If a Project's IRR is 13 percent and the project provides annual cash flows of $15,000 for four years, how much did the project cost?
A)$44,617
B)$52,200
C)$60,000
D)$72,747 PV = 15,000

Question

Quizplus · Accepted Answer

The IRR is the discount rate that makes the net present value (NPV) of the cash flows equal to zero. Using the IRR of 13% and the given cash flows, the present value of the cash flows can be calculated to find the initial investment cost. The calculation shows that the present value of $15,000 for four years at 13% is approximately $44,617.

If a Project's IRR Is 13 Percent and the Project