Suppose Your Venture's Expected Mean Cash Flows Are -$85,000 Initially

question 4

Multiple Choice

Suppose your venture's expected mean cash flows are -$85,000 initially, followed by expected mean cash flows at the end of the first, second, and third years of $40,000, $40,000, and $35,000, respectively. What is the internal rate of return?

• A)13.9%
• B)14.7%
• C)16.2%
• D)17.2%

---

Definitions:

Monthly Payments

Regular payments made once a month, often used in the context of loans or leases.

Rate Of Return

The profit or deficit incurred from an investment over a chosen span of time, depicted as a fraction of the initial investment amount.

Present Value

The contemporary monetary evaluation of a future sum of money or series of cash flows, discounted by a particular rate of return.

Payment Plan

An agreement to pay back a sum of money owed over a period of time in a series of installments.