alleryStart learning →Rs 50,000 invested earns Rs 10,000 a year forever. The IRR is:
A10%
B25%
C15%
D20%
Answer & Solution
Correct answer: D. 20%
For a perpetuity the rate that equates value to cost is annual cash flow over outlay, 10,000 over 50,000, which is 20%.
Keep practising Internal Rate of Return
Browse all Internal Rate of Return questions for CA Inter, or explore more Financial Management topics.
Related questions
The same return received later gives an IRR that is:If cash flows are random variables, as in a life annuity, IRR uses their:The AIRR approach of Magni was introduced to solve problems of:In personal finance the IRR measures what type of performance?With no capital constraint, which projects does a firm accept to maximize value?Mutually exclusive projects are those from which:The equivalent annuity method divides the NPV by what to annualize it?The equivalent annuity method is often used to compare projects of: