Explore BrainMass

Explore BrainMass

    Internal Rate of Return (IRR)

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Billy and Mandy Jones have $25,000 to invest. On average, they do not make any investment that will not return at least 7.5% per year. They have been approached with an investment opportunity that requires $25,000 upfront and has a payout of $6,000 at the end of each of the next 5 years. Using the internal rate of return (IRR) method and their requirements, determine whether Billy and Mandy should undertake the investment.

    © BrainMass Inc. brainmass.com June 4, 2020, 12:12 am ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/internal-rate-return-irr-undertaking-investment-325360

    Solution Summary

    The solution provides step-by-step method for the calculation of internal rate of return (IRR) and determining whether to undertake an investment based on IRR method. Formula for the calculation and Interpretations of the results are also included.

    $2.19

    ADVERTISEMENT