What is the irr of chasteen inc


Problem:

Chasteen Inc. Is considering an investment with an intitial cost of 185,000 that would be depreciated straight line to a zero book value over the life of the project. The cash inflows generated by the project are estimated at 76,000 for the first 2 years and 30,000 for the following 2 years.

Required:

Question: What is the IRR? Please Show Work.

A. 6.44%

B. 6.94%

C. 7.43%

D. 7.55%

E. 8.11%

Note: Please explain comprehensively and give step by step solution.

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