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What Is the IRR of a Project That Requires an Initial

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What is the IRR of a project that requires an initial cash outlay of $12,345 and is expected to generate cash flows of $3,600 a year for three years and then $4,200 a year for two more years? Assume the tax rate is zero.


Definitions:

Inflation

An across-the-board inflation in prices resulting in a diminished capacity of money to purchase goods and services.

Per Capita GDP

Gross Domestic Product per person, a measure of a country's economic output that accounts for its population.

Population

The total number of individuals inhabiting a specific area or country.

Consumption

The use of goods and services by households. It is the largest component of aggregate demand in an economy.

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