What is the IRR for the following project if its initial after tax cost is $5,000,000 and it is expected to provide after-tax operating cash inflows of $1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3 and $1,300,000 in year 4?
A) 15.57%
B) 0.00%
C) 13.57%
D) None of the above

Question

Quizplus · Accepted Answer

To calculate the IRR, we need to find the discount rate that makes the present value of the cash inflows equal to the initial cost. Using a financial calculator or Excel, we find that the IRR for the project is approximately 13.57%. Therefore, the best choice is C) 13.57%.

What Is the IRR for the Following Project If Its