Over a two year time horizon an investor experiences the following net cash flows: Year 0...

 

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Over a two year time horizon an investor experiences the following net cash flows: Year 0 1 2 Cash flow -$8,000 $5,280 $5,320 What is the internal rate of return for the investor? Demonstrate that a bank deposit offering an annual rate equal to the internal rate of return can replicate the above set of cash flows for the investor. Over a two year time horizon an investor experiences the following net cash flows: Year 0 1 2 Cash flow -$8,000 $5,280 $5,320 What is the internal rate of return for the investor? Demonstrate that a bank deposit offering an annual rate equal to the internal rate of return can replicate the above set of cash flows for the investor.

Answer rating: 100% (QA)

To find the internal rate of return IRR we need to find the discount rate that makes the present val... View the full answer