American_Bankers_Association
CTFA · Question #290
CTFA Question #290: Real Exam Question with Answer & Explanation
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Question
BackInSoon, Inc., has estimated that a proposed project's 10-year annual net cash benefit, received each year end, will be $2,500 with an additional terminal benefit of $5,000 at the end of the tenth year. Assuming that these cash inflows satisfy exactly BackInSoon's required rate of return of 8 percent, calculate the initial cash outlay. (Hint: With a desired IRR of 8%, use the IRR formula: ICO = discounted cash flows.)
Options
- A$16,775
- B$19,090
- C$25,000
- D$30,000
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