What Is the Excel Formula to Compute the Internal Rate

question 14

Multiple Choice

What is the Excel formula to compute the internal rate of return for a $32,000 investment and cash inflows of $10,000 per year for years 1 through 4?

• A) =IRR(33000,−10000,−10000,−10000,−10000)
• B) =IRR(−33000,10000,10000,10000,10000)
• C) =IRR(−10000,−10000,−10000,−10000,−33000)
• D) =IRR(10000,10000,10000,10000,−33000)

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability in a set of data, often used in finance to quantify the risk associated with a security or investment portfolio.

Coefficient Of Variation

A standardized measure of the dispersion of a probability distribution or frequency distribution, used to assess risk relative to expected returns.

Beta

Beta is a measure of a stock's volatility in relation to the overall market, indicating its risk relative to the market average.

Required Return

The smallest annual return percentage required to motivate persons or firms to allocate funds into a certain security or initiative.