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What is the IRR of the following set of cash flows? |
Year | Cash Flow |
0 | –$11,242 |
1 | 3,900 |
2 | 6,700 |
3 | 6,800 |
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Internal rate of Return (IRR) for an investment is the discount or interest rate where it is zero in net present value. According to the rule of decision for the IRR method, a plan is accepted only if an estimated IRR of higher than the capital cost.
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