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Thorley Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected.

Year 0 1 2 3 4 5

Cash flows -$1,250 $325 $325 $325 $325 $325

a. 9.43%
b. 9.91%
c. 10.40%
d. 10.92%
e. 11.47%

Respuesta :

Answer:

a. 9.43%

Explanation:

The IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.

The IRR can be found using a financial calculator

The cash flow in year zero = $-1250

Cash flow each year from year one to five =$325

IRR = 9.43%

I hope my answer helps you

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