Assume that an investment generates the following income stream and can be purchased at the beginning of

Question:

Assume that an investment generates the following income stream and can be purchased at the beginning of 2017 for $1,000 and sold at the end of 2020 for $1,200. Estimate the IRR for this investment. If a minimum return of 9% is required, would you recommend this investment? Explain.

End of Year ________Income Stream

2017 ............................... $140

2018 ............................... $120

2019 .............................. $100

2020 ............................... $ 80

2021 ............................... $ 60

2022 ............................... $ 40

2023 ............................... $ 20