- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 5. Capital Investments and Capital Allocation
- Subject 2. Capital Allocation
CFA Practice Question
An investment costs $77,500 and pays $27,500 a year for four years. What is the IRR of this investment?
B. 24.4%
C. 15.6%
A. 22.3%
B. 24.4%
C. 15.6%
Correct Answer: C
User Contributed Comments 11
| User | Comment |
|---|---|
| zhaojiang | PV=-77,500 PMT=27,500 N=4, FV=0, CPT I/Y=15.64 |
| synner | CF0=-77500, C01=27500,F01=4 CPT IRR = 15.6 |
| synner | CF0=-77500, C01=27500,F01=4 CPT IRR = 15.6 |
| aigulb | on HP i get: 77.5 chs g cfo 27.5 g cfj 4 n f irr = 22.8% what i did wrong? |
| whipp | use 4 g Nj instead of 4 n |
| mwali | My BAII Plus calculator does not seem to be working . Please help |
| timothykoo | Be sure you clear the worksheet before you key in, synner's way of solution. I have the same problem. Just hit 2nd and ce|c (or CLR WORK). |
| chris12345 | mwali, make sure you put your minus sign on the PV! |
| Kobe8kenji | thanks chris! u solved my error in my BA plus |
| jonan203 | whipp: by pressing <n>, in this case, you discount a SINGLE cashflow of $27,500 for four periods <Nj> discounts FOUR separate cash flows of $27,500 |
| rjdelong | yep Chris is the man! |