Asked by Mikayla Pearson on Jul 05, 2024
Verified
Estimate the internal rate of return (IRR)
Minwest Company invested $140 000 in an eight-year project. Annual cash inflows are estimated at $30 000 per year.
Estimate the IRR.
Internal Rate of Return
A financial metric that estimates the profitability of potential investments by calculating the discount rate that makes the net present value of all cash flows from a project equal to zero.
- Gain insight into the process of evaluating and ranking investment projects using key financial benchmarks such as net present value (NPV), internal rate of return (IRR), and profitability indexes.
- Gain insight into the complex nature of projecting future cash flows and modifying capital budgeting processes to account for risk.
Verified Answer
PG
Learning Objectives
- Gain insight into the process of evaluating and ranking investment projects using key financial benchmarks such as net present value (NPV), internal rate of return (IRR), and profitability indexes.
- Gain insight into the complex nature of projecting future cash flows and modifying capital budgeting processes to account for risk.