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$30.328 million is to be invested in a project that will yield annual net cash inflows of $8 million for 5 years.
What is the project's internal rate of return (IRR)?
Give your answer to the nearest whole percentage.
Suggested Answer: A, C, D
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31 comments · newest first
CL
Clorinda
11 months ago
11% seems too optimistic for this project.
KR
Kristel
11 months ago
Wait, how can it be that high? Sounds off.
CU
Curt
11 months ago
Definitely 10%, I did the math!
KE
Kenia
12 months ago
I think it's closer to 9%.
LE
Leatha
12 months ago
The IRR is around 10%.
EV
Evelynn
1 year ago
I’m a bit lost on whether to use a financial calculator or Excel for this. I’ve seen both methods in practice questions.
TO
Torie
1 year ago
If I recall correctly, the IRR is the rate that makes the net present value zero. I hope I can remember how to calculate that during the exam.
ME
Melissia
1 year ago
I remember practicing a similar question where we had to find the IRR using the cash flow formula. I think it involved some trial and error with different rates.
OS
Osvaldo
1 year ago
I think we need to use the cash inflows and the initial investment to calculate the IRR, but I'm not entirely sure how to set it up.
ME
Melvin
1 year ago
I'm feeling pretty confident about this one. IRR calculations are straightforward, I just need to be careful with the math. I'll work through it systematically.
BR
Brittni
1 year ago
No problem, I've got this. IRR is all about finding the discount rate that makes the NPV equal zero. I'll set that up and solve it step-by-step.
JO
Jolanda
1 year ago
Wait, how do I calculate the IRR again? I'm a little fuzzy on the steps. Maybe I should review my notes before trying this one.
JU
Julian
1 year ago
Hmm, this looks like a classic IRR calculation. I'll need to use the NPV formula and solve for the discount rate that makes the NPV equal to zero.
DA
Dalene
1 year ago
Okay, I think I know how to do this. I just need to plug the numbers into the IRR formula and solve for the rate. Shouldn't be too tricky.
CH
Charlie
1 year ago
This is a tricky one, but I think I can figure it out. I'll need to pay close attention to the details and make sure I select the configurations that meet all the requirements.
CH
Cheryl
1 year ago
Hmm, I'm not too sure about this one. I'll have to think through the typical dosing for bisphosphonate medications used in osteoporosis.
LU
Luisa
1 year ago
Wait, I thought we were supposed to invest in a project that yields a 30% return? Guess I misread the question. Ah well, 10% it is!
JU
Julene
1 year ago
Alright, time to put my finance chops to the test. I'm going with 10% - it's the Goldilocks of the options, not too hot, not too cold.
EF
Effie
1 year ago
Haha, this is easy! I'm going to pick 9% and watch the rest of you scramble to catch up.
KE
Keshia
1 year ago
I'm not sure, but I'll go with 10% too.
MA
Maynard
1 year ago
I'm sticking with 9% like the first user.
LA
Lashandra
1 year ago
I think I'll go with 11% as my answer.
MA
Marshall
1 year ago
I'm going with 10% for the project's internal rate of return.
HE
Helaine
1 year ago
10% seems like a safe bet, but I'm feeling a little adventurous. Maybe I'll go with 11% and see if I can beat the system!
CL
Clemencia
1 year ago
Hmm, I'm going to go with 10% - it just feels right, you know? Gotta trust my gut on this one.
TA
Tamar
1 year ago
User 3: I agree, 10% sounds like a good estimate.
LI
Linn
1 year ago
User 2: Yeah, that seems like a reasonable choice.
NO
Nobuko
1 year ago
User 1: I think I'll go with 10% as well.
DE
Deeanna
2 years ago
I'm not sure, but I think it could also be 11% because the project seems quite profitable
LE
Leigha
2 years ago
I agree with Lashanda, 10% makes sense based on the cash inflows and initial investment
LA
Lashanda
2 years ago
I think the IRR is 10%