Question

What is the internal rate of return on a project that requires a $20,000 investment now, and provides returns to the investor of $12,000 one year from now and $12,000 two years from now?

Name: what is the internal rate of return on a project that requires a 20000 investment now and provides returns to the investor of 12000 one year from now and 12000 two years from now 28034
Uploaded: 2023-12-14T23:10:27-08:00
Duration: 2 min 1 s
Channel: Akash M
Description: what is the internal rate of return on a project that requires a 20000 investment now and provides returns to the investor of 12000 one year from now and 12000 two years from now 28034

          What is the internal rate of return on a project that requires a $20,000 investment now, and provides returns to the investor of $12,000 one year from now and $12,000 two years from now?

Added by Margarita J.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

12/14/2023

Step 1

The cash flows for this project are as follows: - Initial investment (Year 0): -$20,000 - Cash inflow (Year 1): +$12,000 - Cash inflow (Year 2): +$12,000 The formula for NPV is: \[ NPV = \sum \frac{C_t}{(1 + r)^t} \] Where: - $C_t$ = cash flow at time Show more…

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What is the internal rate of return on a project that requires a $20,000 investment now, and provides returns to the investor of $12,000 one year from now and $12,000 two years from now?