Why should I choose AnalystNotes?

AnalystNotes specializes in helping candidates pass. Period.

Find out more

Basic Question 10 of 29

An investment costs $77,500 and pays $27,500 a year for four years. What is the IRR of this investment?

A. 22.3%
B. 24.4%
C. 15.6%
Check Answer Previous Q Next Q Print

User Contributed Comments 11

User Comment
zhaojiang PV=-77,500 PMT=27,500 N=4, FV=0, CPT I/Y=15.64
synner CF0=-77500, C01=27500,F01=4
CPT IRR = 15.6
synner CF0=-77500, C01=27500,F01=4
CPT IRR = 15.6
aigulb on HP i get: 77.5 chs g cfo
27.5 g cfj
4 n
f irr = 22.8% what i did wrong?
whipp use 4 g Nj instead of 4 n
mwali My BAII Plus calculator does not seem to be working . Please help
timothykoo Be sure you clear the worksheet before you key in, synner's way of solution. I have the same problem.
Just hit 2nd and ce|c (or CLR WORK).
chris12345 mwali, make sure you put your minus sign on the PV!
Kobe8kenji thanks chris! u solved my error in my BA plus
jonan203 whipp:

by pressing <n>, in this case, you discount a SINGLE cashflow of $27,500 for four periods

<Nj> discounts FOUR separate cash flows of $27,500
rjdelong yep Chris is the man!
You need to log in first to add your comment.
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

Learning Outcome Statements

describe the capital allocation process, calculate net present value (NPV), internal rate of return (IRR), and return on invested capital (ROIC), and contrast their use in capital allocation

CFA® 2025 Level I Curriculum, Volume 2, Module 5.