Suppose your firm is considering investing in a project that requires an initial investment of $200,000 at Year 0, and returns cash flows at the end of Years 1 to 3 of $50,000, $100,000 and $150,000 respectively. Further, assume your company’s cost of capital is 15%. What is the internal rate of return of the project (round your IRR to the nearest tenth of a percent, e.g., 10.1%)?

Q: Suppose your firm is considering investing in a project that requires an initial investment of $200,000 at Year 0, and returns cash flows at the end of Years 1 to 3 of $50,000, $100,000 and $150,000 respectively. Further, assume your company’s cost of capital is 15%. What is the internal rate of return of the project (round your IRR to the nearest tenth of a percent, e.g., 10.1%)?

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Q: Let’s say your company is thinking of funding a project that would yield cash flows of $50,000, $100,000, and $150,000 at the end of Years 1 through 3, respectively, after requiring an initial expenditure of $200,000 in Year 0. Additionally, suppose that the cost of financing for your business is 15%. How much is the project’s internal rate of return? Round it to the closest tenth of a percent, for example, 10.1%.

• 15.0%
• None of these are true
• 24.1%
• 22.6%
• 19.4%