Pregunta
- Find the IRR of an investment having initial cash outflow of Rs. 213,000. The cash inflows during the first, second, third and fourth years are expected to be Rs. 65,200, Rs. 96,000, Rs. 73,100 and Rs. 55,400 respectively.
A)
B)
C)
D)
A)
B)
C)
D)
Ask by Chang Pena. in Pakistan
Jan 19,2025
Solución de inteligencia artificial de Upstudy
Respuesta verificada por el tutor
Responder
The Internal Rate of Return (IRR) for the investment is approximately 14.05%.
Answer:
B)
B)
Solución

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Como
Bonus Knowledge
To find the IRR (Internal Rate of Return) for the investment, we can use the cash flows provided and set the net present value (NPV) equal to zero. The cash flows are as follows:
- Initial Outflow (Year 0): Rs. 213,000
- Inflow (Year 1): Rs. 65,200
- Inflow (Year 2): Rs. 96,000
- Inflow (Year 3): Rs. 73,100
- Inflow (Year 4): Rs. 55,400
Using a financial calculator or Excel to compute the IRR, we input the cash flows corresponding to each year. By solving, we find that the IRR is approximately
, which corresponds to option B.
Remember, the IRR is the discount rate that makes the NPV of all cash flows from the investment equal to zero, providing a benchmark to evaluate the potential return of the investment versus the costs.

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