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Consider a project with the following cash flows: CASH FLOW CASH FLOW CASH FLOW CASH FLOW AT TIME 0 AT TIME 1 AT TIME 2

Consider a project with the following cash flows:

CASH FLOW CASH FLOW CASH FLOW CASH FLOW AT TIME 0 AT TIME 1 AT TIME 2 AT TIME 3 -1243.43 500 500 500

The internal rate of return on this project is 10%.

What is the major reinvestment rate assumption that we make with respect to this IRR of 10%?

What is the Realized Return if the interest rate is 15%? (i.e.; cash flows will be reinvested at 15%)

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