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In: Finance

An investment requires an outlay of $20,000 and has an expected cash flow of $23,700 one...

An investment requires an outlay of $20,000 and has an expected cash flow of $23,700 one year later. What is the internal rate of return of the investment?

Solutions

Expert Solution

The IRR is computed as follows:

= (Expected cash flow one year later / Investment) - 1

= ($ 23,700 / $ 20,000) - 1

= 18.50%

jeff jeffy answered 2 years ago
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