Question
A firm with a 10.5 percent cost of capital is considering a project for this years capital budget. The projects expected after-tax cash flows are
A firm with a 10.5 percent cost of capital is considering a project for this years capital budget. The projects expected after-tax cash flows are as follows:
| Year: | 0 | 1 | 2 | 3 | 4 |
| Cash flow: | -$8,000 | $3,600 | $3,000 | $3,900 | $3,800 |
Calculate the projects internal rate of return (IRR).
| a. | 19.19% | |
| b. | 27.42% | |
| c. | 78.75% | |
| d. | 15.63% | |
| e. | 39.43% |
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Elements Of Financial Risk Management
Authors: Peter Christoffersen
2nd Edition
0128102357, 9780128102350
