Chapter 18, Problem 9CP

Summary Introduction

To calculate:

The internal rate of return (IRR) of the two-year investment which gives $\$150$ earing in both the years ovet the initial amount of $\$2000$ .

Introduction:

IRR is basically a discount rate which makes cash inflows equals the capital investment of the project. It is mostly used in capital budgeting to predict the profitability of the investment.