Answer (D) is correct . The IRR can be calculated by equating the initial cash outlay with the present value of the net cash inflows: $50,000 = $7,791 (PV at i for 10 periods) $50,000 ¡Â $7,791 = 6.418 Using a PV table, 6.418 is PV at 9% for 10 periods.
Answer (A) is incorrect because Discounting the cash inflows at 6% would not produce a NPV of zero.
Answer (B) is incorrect because Discounting the cash inflows at 7% would not produce a NPV of zero.
Answer (C) is incorrect because Discounting the cash inflows at 8% would not produce a NPV of zero.
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