Determine What Project Y IRR is

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Below are the expected after-tax cash flows for Projects Y and Z. Both projects have an initial cash outlay of $20,000 and a required rate of return of 17%.

                  Project Y                    Project Z

Year 1            $12,000                    $10,000

Year 2             $8,000                       $10,000

Year 3              $6,000                            0

Year 4                $2,000                          0

Year 5                  $2,000                        0

Problem 1: Project Y's IRR is:

1. 12.51%
2. less than zero.
3. 22.51%.
4. less than 17%.

Reference no: EM132646931

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