Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1800. Year Net Cash Flow

A)14%
B)12%
C)8%
D)25%

Question

Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1800. Year Net Cash Flow

A)14% 
B)12% 
C)8% 
D)25%

Quizplus · Accepted Answer

Using trial and error or a financial calculator, we can calculate the IRR to be approximately 14%. This means that the project's rate of return is 14%, which is higher than the required rate of return, making it a profitable investment.

Given the Following Annual Net Cash Flows, Determine the IRR