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Investment is selling for $903.10 and promises to make the following annual payments: Years from Now Promised Annual Payments (Cash Flow to Investor) 1 $100
Investment is selling for $903.10 and promises to make the following annual payments:
Years from Now | Promised Annual Payments (Cash Flow to Investor) |
1 | $100 |
2 | $100 |
3 | $100 |
4 | $1,000 |
A) What is this investments internal rate of return?
(b) What is one caveat or implicit assumption we make when using an IRR?
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