Question

What is the IRR for a project with the following cash flows: Year 0 −5000, Year 1 +3000, Year 2 +4000?

A)10.1%B)15.0%C)24.3% D)31.0%

Answer 1

Answer : 24.3%

IRR : Internal rate of retun is the rate of retrun where the total Cash Net present vllue = 0

Year	CF	PVOF $1 at 24%	PVCF
0	-5000	1	-5000
1	3000	0.806452	2419
2	4000	0.650364	2601
		Net Present Vaue	20.81

Prox : IRR is 24%

From the Answers : 24.3% is the IRR

From Excel

investment Requires Cash Flows 1 2 IRR Excel Function Project -5000 3000 4000 =IRR(C496:C498) IRR(values, (guess])

investment Requires Cash Flows 1 2 IRR Excel Function Project -5000 3000 4000 24.34%