16. You are considering an investment with the following cash flows: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000 What is the internal rate of return (IRR) for this investment? SHOW WORK

16. You are considering an investment with the following cash flows: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000 What is the internal rate of return (IRR) for this investment? SHOW WORK

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 1CMA

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Question

16. You are considering an investment with the following cash flows:

Year Cash Flow

0 -$50,000

1 $ 7,000

2 $ 4,000

3 $9,000

4 $61,000

What is the internal rate of return (IRR) for this investment?

SHOW WORK

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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