Determine to the nearest percent the IRR on the following projects:

a. An initial outlay of $10,000 resulting in a free cash flow of $2,000 at the end of year 1, $5,000 at the end of year 2, and $8,000 at the end of year 3.

b. An initial outlay of $10,000 resulting in a free cash flow of $8,000 at the end of year 1, $5,000 at the end of year 2, and $2,000 at the end of year 3.

c. An initial outlay of 510,000 resulting in a free cash flow of $2,000 at the end of years 1 through 5 and $5,000 at the end of year 6.

Answer rating: 100% (QA)

Internal Rate of Return IRR is the rate that measures the profitability for future projects It is the discount rate that makes the Net Present Value f... View the full answer