9. A four-year project requires $1,000,000 as the first cost and brings $2,000,000 at the end of the 4th year. If expected annual inflation over this period is 5%, what is the real IRR of this project?
9. A four-year project requires $1,000,000 as the first cost and brings $2,000,000 at the end of the 4th year. If expected annual inflation over this period is 5%, what is the real IRR of this project?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:9. A four-year project requires $1,000,000 as the first cost and brings $2,000,000 at the end of
the 4th year. If expected annual inflation over this period is 5%, what is the real IRR of this
project?
a. 13.3%
b. 18.9%
c. 27.6%
d. 47.6%
e. 95.0%
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