You are evaluating an investment that requires $1,000 upfront, and pays $100 at the end of each of the first 2 years, and an additional lump-sum of $5,000 at the end of year 2. What would happen to the IRR if the annual payments at the end of each of the first 2 years go up from $100 to $200?
Multiple Choice:
IRR doesn't change
IRR decreases
IRR increases
When cash inflows increases from 100 to 200 IRR increases
because discount rate to get NPV increases.
Option c IRR increases.
.
You are evaluating an investment that requires $1,000 upfront, and pays $100 at the end of...