Question

A project has the following cash inflows $40,000; $60,500; $70,000; and $48,800 for years 1 through...

A project has the following cash inflows $40,000; $60,500; $70,000; and $48,800 for years 1 through 4, respectively. The initial cash outflow is $184,000. Which of the following four statements is correct concerning the project internal rate of return (IRR)?

Select one:

a. The IRR is less than 10%

b. The IRR is greater than or equal to 10%, but less than 14%.

c. The IRR is greater than or equal to 14%, but less than 18%.

d. The IRR is greater than 18%.

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Answer #1
Cash flows Year
        (184,000.00) 0
             40,000.00 1
             60,500.00 2
             70,000.00 3
             48,800.00 4

Use IRR function in Excel

IRR = 7.14%

a. The IRR is less than 10%

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