Joe M Purchases a House for $410,000

question 28

Multiple Choice

Joe M. purchases a house for $410,000. He sells the home 8 years later for $629,000. What is his internal rate of return (IRR) ?

• A) 5.15%
• B) 1.50%
• C) 15%
• D) 5.50%

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Definitions:

Operating Assets

Assets used in the daily operations of a business to generate income, including equipment, machinery, and buildings.

Sales

The total revenue a company generates from selling goods or services over a specific period of time.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or the business cycle, whichever is longer.

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted into cash within a year.