Question
An investment costs $15,000 today and promises the following cash flows at the end of years 1 through 5, respectively: $3500; $4500; $5500; $5500; $5500.
An investment costs $15,000 today and promises the following cash flows at the end of years 1 through 5, respectively: $3500; $4500; $5500; $5500; $5500. Would you purchase this investment today if your required rate of return on this investment were 16%?
Yes, because the IRR is 15.75%
Yes, because the IRR is 17.42%
No, because the IRR is 17.42%
No, because the present value of future cash flows is $15,541.31
No, because the IRR is 15.75%
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th Edition
1260772381, 978-1260772388
