CFA Practice Question

There are 233 practice questions for this study session.

CFA Practice Question

A capital project with a net present value (NPV) of $23.29 has the following cash flows:

Year 0: -100
Year 1: 30
Year 2: 40
Year 3: 40
Year 4: 30
Year 5: 20

The internal rate of return (IRR) for the project is closest to ______.
A. 15%
B. 19%
C. 21%
Explanation: Using a calculator, enter CF0 = -100, CF1 = 30, CF2 = 40, CF3 = 40, CF4 = 30, CF5 =20, solve for IRR. The IRR is 19.25%.

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