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
Related questions
Question
onsider the following cash flows:
C0=-$42
C1=+$38
C2=+$38
C3=+$38
C4=-$76
a. Which two of the following rates are the IRRs of this project?
Expert Solution
Step 1 Concept
Internal Rate of Return : It is a discount rate at which net present value of a project is zero.
Here two IRR means minimum and high discount rate at which the net present value of a project would be zero.
Step 2 Calculation
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