The Fargas Company Invested $90,000 in a Two-Year Project in Which

question 26

Multiple Choice

The Fargas Company invested $90,000 in a two-year project in which net cash inflows for the first year totaled $57,000. Assume that the cash flows for the year all occur on the last day of the year. If the internal rate of return was exactly 10%, the cash flow for the second year must have been (without considering the effect of taxes) :

• A) $36,300
• B) $30,562
• C) $33,000
• D) $46,231

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