Buzz Lightyear has been offered an investment in which he expects to receive payments of $4,000 at the end of each of the next 1

Question

3 years ago

15

0 years in return for an initial investment of $10,000 now. a. What is the IRR of the proposed investment

1 answer:

LenaWriter [7] · Answer 1 · 2022-05-23T01:23:49+03:00

Answer:

IRR= 21.86%

Explanation:

Giving the following information:

Initial investment (PV)= $10,000

Cash flows (PMT)= $4,000 per year

Number or years (n)= 4

<u>It is extremely difficult to calculate the IRR using the formula. We will use the financial calculator.</u>

Function: CMPD

n= 4

I%= SOLVE = 21.86%

PV= 10,000

PMT= -4,000

IRR= 21.86%