Internal Rate of Return (IRR) of a project is the discount rate at which the present value of all the cash inflows is equal to the present value of cash outflows. IRR is similar to the yield to maturity (YTM) of a bond. A project with IRR greater than the required rate of return cost or the project shall be accepted. IRR of a project is calculated using a financial calculator. All financial calculators have an inbuild cash flow register, Cash flows in accordance of the timeline and with proper +/- signs should be input, then press the key labelled “IRR”. It will return the internal rate of return of the project. A project has initial cost of $74,000 and is expected to generate $16,500 for the next six years.

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Chapter 9, Problem 6PROB

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Internal Rate of Return (IRR) of a project is the discount rate at which the present value of all the cash inflows is equal to the present value of cash outflows. IRR is similar to the yield to maturity (YTM) of a bond. A project with IRR greater than the required rate of return cost or the project shall be accepted.

IRR of a project is calculated using a financial calculator. All financial calculators have an inbuild cash flow register, Cash flows in accordance of the timeline and with proper +/- signs should be input, then press the key labelled “IRR”. It will return the internal rate of return of the project.

A project has initial cost of $74,000 and is expected to generate $16,500 for the next six years.

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