What Is the IRR for the Following Project If Its

question 70

Multiple Choice

What is the IRR for the following project if its initial after-tax cost is $5,000,000 and it is expected to provide after-tax operating cash flows of ($1,800,000) in year 1, $2,900,000 in year 2, $2,700,000 in year 3, and $2,300,000 in year 4?

• A) 5.83%
• B) 9.67%
• C) 11.44%
• D) 6.85%

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Definitions:

Capital Account

An account showing the net worth of a business entity, including its equity and investments.

Asset Account

An account that records the assets owned by a company, showing their value on the balance sheet.

Cash Balance

The amount of cash or cash equivalents a company or individual possesses at any given time.

Disbursements

The act of paying out or distributing money, often by a business for various expenses.