Multiple Choice
I sign a contract that guarantees me an immediate payment of $2 000, but then I have to invest $800 a year for ten years. At the end of the tenth year I get a further payment of $8 000. What is my internal rate of return on the contract?
A) There are two solutions: 8% and 16%.
B) There are two solutions: 13% and 25%.
C) There are two solutions, 15% and 30%.
D) There are two solutions: 18% and 24%.
E) There is a single solution: about 22%.
Correct Answer:
Verified
Correct Answer:
Verified
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