RatedrillInternal rate of return
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
An investment costs $25,000 today and returns $17,500, $15,500 and $14,000 at the end of years 1 to 3. What is its internal rate of return?
What this problem teaches
Use the cash flow worksheet (CF), each frequency 1, then IRR.
A hint if you get stuck
IRR is the discount rate that makes NPV exactly zero. Use the CF worksheet or Excel's IRR.
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