Quantitative Methods Q54

54Lee Kwan Group is about to invest in a 2-year project that requires an initial outlay of $5 million. The expected cash flows in years 1 and 2 are $3 million and $3.5 million respectively. The internal rate of return of this project is closest to:

Option : B
Explanation : Using a financial calculator, compute IRR:CF0 = -5,000,000, CF1 = 3,000,000, CF2 = 3,500,000; CPT IRR = 18.88% ≈ 19%.

Forgot your password?

I agree with the Terms.