CFA Practice Question

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CFA Practice Question

An investment costs $77,500 and pays $27,500 a year for four years. What is the IRR of this investment?

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!
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