Answer:
The IRR of the project is 13%.
Explanation:
ABC Co wishes to undertake a project requiring an investment of $732,000 which will generate equal annual inflows of $146,400 in perpetuity. If the first inflow from the investment is a year after the initial investment, what is the IRR of the project?
The first inflow from the investment is a year after the initial investment. Solving for "n", we get:
$2,548,831 = 732000/(1 + n)^1
$732,000/((1*(1+n))^1) = $2,548,831
$n = ln(($2,548,831)/$732000)
Using the function of n that we found above:
$n = ln((($2,548,831/$732000))/1)
Plugging in for "n" to get the IRR:
IRR = 13%
