Given the Following Expected Cash Flow Stream, Determine the IRR

question 19

Multiple Choice

Given the following expected cash flow stream, determine the IRR of the proposed investment in an income producing property and determine whether or not the investment should be pursued using IRR as your decision making criteria. Investment Horizon: 5 years; Expected Yearly Cash Flow in each of the next five years: $127,628. Expected Sale Price at end of 5 years: $1,595,350; Required return on equity: 5%; Current Market Price of Property: $1,750,000

• A) IRR is 4.92%; Decision is to invest
• B) IRR is 4.92%; Decision is to not invest
• C) IRR is 5.72%; Decision is to invest
• D) IRR is 5.72%; Decision is to not invest

---

Definitions:

Mass

A measure of the amount of matter in an object, usually expressed in grams or kilograms.

Isotopes

Variants of a particular chemical element which have the same number of protons in their nuclei but differ in the number of neutrons, leading to different atomic masses.

Atomic Number

The number of protons in the nucleus of an atom, which defines the chemical element.

Mass Numbers

The total number of protons and neutrons in the nucleus of an atom, indicating its atomic mass.