Dons Corporation is planning a 15 year project with an initial investment of $2,500,000.The project will have $400,000 cash inflows per year in years 1-5; $200,000 cash inflows in years 6-10, and $40,000 cash inflows in years 11-15.Determine the projects rate of return.
A)12.67%
B)9.35%
C)5.15%
D)3.67% Using the BAII Plus Calculator:

Question

Quizplus · Accepted Answer

The project's rate of return is calculated by finding the internal rate of return (IRR) that makes the net present value (NPV) of cash flows equal to zero. Using the BAII Plus Calculator, input the cash flows: CF0 = -2,500,000, CF1-5 = 400,000, CF6-10 = 200,000, CF11-15 = 40,000. Compute IRR to find it is approximately 5.15%.

Dons Corporation Is Planning a 15 Year Project with an Initial