Calculations of the IRR Based on a Value of R

question 14

Multiple Choice

Calculations of the IRR based on a value of r = 5% give a NPV value of £234,000. Trying the effect of increasing and decreasing r gives - £876,000 when r = 10% and £456,000 when r = 2%. Which of the following values of r is most likely to be correct?

• A) 9.7%
• B) 6.2%
• C) 1.7%
• D) 2.5%

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