Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now. The Internal Rate of return of this project is closest to:

Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now. The Internal Rate of return of this project is closest to:

Naim 14:02

Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now, $450,000 two years from now, and $650,000 three years from now.
The Internal Rate of return of this project is closest to:



A) 10.2%
B) 12.2%
C) 14.2%
D) 16.2%

Answer: C) NPV = 0 = -1,000,000 + 250,000/(1.142)1+ 450,000/(1.142)2+ 650,000/(1.142)3


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