Calculate the internal rate of return (IRR)of following two projects

jagguarpaw January 16, 2017 0 Comments

Question:  Calculate the internal rate of return (IRR)…

Calculate the internal rate of return of following two projects. Consider the following two projects:

Year 0                        year 1                    year 2                year 3                       year 4

Project                 cash flow                     cash flow                 cash flow             cash flow                    cash flow

A                               -100                            40                         55                          60                           N/A

B                                -73                             30                          30                         30                            30

And discount rate is .15 for each project.

The internal rate of return IRR for project A is closet to

  1. 7%
  2. 6%
  3. 7%
  4. 9%