What Is the Internal Rate of Return (IRR) of an Investment

question 63

Multiple Choice

What is the internal rate of return (IRR) of an investment that requires an initial investment of $11,000 today and pays $15,400 in one year's time?

• A) 37%
• B) 44%
• C) 43%
• D) 40%

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Definitions:

Consideration

Something of value exchanged between parties in a contract, making the agreement legally binding.

Inadequate Consideration

A situation in a contractual agreement where the value exchanged between parties is significantly disproportionate or deemed insufficient.

Fraud

Deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Contract

A legally binding agreement between two or more parties that is enforceable by law, characterized by an offer, acceptance, consideration, and mutual intent to be bound.