ABC Co wishes to undertake a project requiring an investment of $732,000 which will generate equal annual inflows of $146,400 in perpetuity. If the first inflow from the investment is a year after the initial investment, what is the IRR of the project? *

The IRR of the project is 13%.

Explanation:

ABC Co wishes to undertake a project requiring an investment of $732,000 which will generate equal annual inflows of $146,400 in perpetuity. If the first inflow from the investment is a year after the initial investment, what is the IRR of the project?

The first inflow from the investment is a year after the initial investment. Solving for "n", we get:

$2,548,831 = 732000/(1 + n)^1

$732,000/((1*(1+n))^1) = $2,548,831

$n = ln(($2,548,831)/$732000)

Using the function of n that we found above:

$n = ln((($2,548,831/$732000))/1)  

Plugging in for "n" to get the IRR:

IRR = 13%

the answer is d

explanation:

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23