Question

What is the IRR of a project that costs $74,361.78 and provides cash-inflows of $25,000 annually for four years

Answer 1

Answer:

13%

Explanation:

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Cash flow in year 0 = $-74,361.78

Cash flow in year 1 - 4 = 25,000

IRR = 13%