Answered: The firm invests $100 today in…

The firm invests $100 today in anticipation of getting back only one future cashflow in the amount of $131 at year end. What is the IRR?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter13: Other Financing Alternatives

Section: Chapter Questions

Problem 1aM

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Question

The firm invests $100 today in anticipation of getting back only one future cashflow in the amount of $131 at year end. What is the IRR?

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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