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Question
Use the following information to answer the following question(s).Below are the expected after-tax cash flows for Projects Y and Z. Both projects have an initial cash outlay of $20,000 and a required rate of return of 17%.
| Project Y | Project Z | |
| Year 1 | $12,000 | $10,000 |
| Year 2 | $8,000 | $10,000 |
| Year 3 | $6,000 | 0 |
| Year 4 | $2,000 | 0 |
| Year 5 | $2,000 | 0 |
You are considering investing in a project with the following year-end after-tax cash flows:
Year 1: $5,000
Year 2: $3,200
Year 3: $7,800
If the initial outlay for the project is $12,113, compute the project's IRR.
A) 14%
B) 10%
C) 32%
D) 24%
Answer
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