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20) Miller Brothers is considering a project that will produce cash inflows of $32,500, $38,470, $40,805, and $41,268 a year for the next four years, respectively. What is the internal rate of return if the initial cost of the project is $184,600

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Zviko

Answer:

6.81%

Explanation:

The internal rate of return (IRR)  is the interest rate that will make the present value of cash flows equal to the price or initial investment.

Calculation of IRR of Project A using a Financial Calculator :

    Project

($184,600) CFj

$32,500         Cfj

$38,470         Cfj

$40,805         Cfj

$41,268         Cfj

Shift IRR/YR 6.8057 or 6.81%

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