Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the IRR for an investment of 10000 that gives returns of 5000, 5000 and 2000 in years 1, 2 and 3 respectively?

 

What is the IRR for an investment of 10000 that gives returns of 5000, 5000 and 2000 in years 1, 2 and 3 respectively? There are two projects. One has an IRR of 12, the other has an IRR of 14. The hurdle rate is 13%. Which project do you choose and why?

Step by Step Solution

3.44 Rating (151 Votes )

There are 3 Steps involved in it

Step: 1

To calculate the Internal Rate of Return IRR for an investment we need to find the discount rate tha... 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_2

Step: 3

blur-text-image_3

Document Format ( 2 attachments)

PDF file Icon
663e6afe99912_956648.pdf

180 KBs PDF File

Word file Icon
663e6afe99912_956648.docx

120 KBs Word File

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

Valuation The Art and Science of Corporate Investment Decisions

Authors: Sheridan Titman, John D. Martin

3rd edition

133479528, 978-0133479522

More Books

Students also viewed these Accounting questions

Question

What is Message format abstraction? What is it important

Answered: 1 week ago