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Find internal rate of return of a project with an initial cost of $43,000, expected net...

Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows of $9,550 per year for 8 years, and a cost of capital of 11.25%.

Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72.

A. 14.90%

B. 11.17%

C. 16.68%

D. 15.05%

E. 11.32%

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Answer #1

Let irr be x%
At irr,present value of inflows=present value of outflows.

43000=9550/1.0x+9550/1.0x^2+9550/1.0x^3+............+9550/1.0x^8

Hence x=irr=14.90(Approx).

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