Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A project has a cash flow of -$50,000 at time 0, a cash flow of $10,000 at time 1 year, and a cash flow of

A project has a cash flow of -$50,000 at time 0, a cash flow of $10,000 at time 1 year, and a cash flow of $15,000 at time 2 years. Assuming ordinary economic conditions, what is the IRR of these cash flows?

A. The project has a double IRR of -17.16%, corresponding to the double root of the equation defining the IRR.

B. The IRR is about 34%.

C. The cash flows do not have an IRR under normal economic conditions.

D. The IRR is -34.32%.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mergers And Acquisitions Integration Handbook

Authors: Scott C. Whitaker

1st Edition

111800437X, 978-1118004371

More Books

Students also viewed these Finance questions

Question

Develop successful mentoring programs. page 400

Answered: 1 week ago