Q: Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1,520.
Year Net Cash Flow
1 $1,000
2 $1,500
3 $ 500

A. 28%
B. 40%
C. 32%
D. 48%

A: I will provide two answers because it depends on the interpretation.
1. If cash flow starts to bring income in the year of initial outlay: 218.9%
2. [ If cash flow starts to bring income next year from the of initial outlay: 47.7%
Used IRR function in Excel. ]

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Asked 9/2/2013 10:52:06 PM

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