What is the internal rate of return (IRR)of an investment that requires an initial investment of $10 000 today and pays $14 000 in three years' time?
A)11.87%
B)12.01%
C)11.78%%
D)10.02%

Question

Quizplus · Accepted Answer

Using the formula for IRR, we can set up the following equation:
$10,000 = \frac{$14,000}{(1+IRR)^3}$
Solving for IRR using trial and error, the closest answer is A) 11.87%.

What Is the Internal Rate of Return (IRR)of an Investment