What is the true IRR of the following project? Assume the firm would be able to...

What is the true IRR of the following project? Assume the firm would be able to reinvest the cash flows at a 7% rate of return. Year A 0 -1,000 1 600 2 400 3 400

Select one: a. 15.32% b. 14.00% c. 12% d. 14.21% e. 14.85%

Expert Solution

The true IRR will be the MIRR with 7% as reinvestment rate.

The true IRR or MIRR is calculated below

Therefore, the correct option is e.14.85%

jeff jeffy answered 2 years ago

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