A project has the following cash flows. What is the internal rate of return?YearsCash flow-$46.80011.26018.22015.9504.13,560O 9.75 percentO 10.28 percentO 10.60 percentO 10.67 percentO 11.23 percent2 3.

Solution:- Internal Rate of Return (IRR) is the rate of return which the bank is yielding. At IRR,…

A project has the following cash flows. What is the internal rate of return? Years Cash flow -$46.800 11,260 2 18.220 15.950 13,560 O 9.75 percent O 10.28 percent O 10.60 percent O 10.67 percent O 11.23 percent 34

A project has the following cash flows. What is the internal rate of return? Years Cash flow -$46.800 11,260 2 18.220 15.950 13,560 O 9.75 percent O 10.28 percent O 10.60 percent O 10.67 percent O 11.23 percent 34

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

A project has the following cash flows. What is the internal rate of return?
Years
Cash flow
-$46.800
11.260
18.220
15.950
4.
13,560
O 9.75 percent
O 10.28 percent
O 10.60 percent
O 10.67 percent
O 11.23 percent
2 3.

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An investment will provide the following future cash flows. Year 1 = 5,919 Year 2 = 8,327 Year 3 and 4 = 4,718 Year 5 = 3,048 Using a 9.01% discount rate, what is the present value of this investment?
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