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IRR

What is the IRR of an investment that costs $77,700 and pays $27,500 a year for 4 years?

Solution Preview

At IRR, the PV of the cash flows will be equal to the initial investment. The cash flows are an annuity here, so we get
27,500 X PVIFA (4 years, ...

Solution Summary

The solution explains how to calculate the IRR of an investment

$2.19