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Exam Code : C-ARSOR-2108

Exam Name : SAP Certified Application Associate - SAP Ariba Sourcing

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NEW QUESTION: 1
Your company is planning to open a new gold mine which will cost $3 million to build, with the expenditure occurring at the end of the year. The mine will bring year-end after-tax cash inflows of $2 million at the end of the two succeeding years, and then it will cost $0.5 million to close down the mine at the end of the third year of operation. What is this project's IRR?
A. 14.36%
B. 10.17%
C. 17.42%
D. 12.70%
E. 21.53%
Answer: D
Explanation:
Explanation/Reference:
Explanation:
Time line:
0123
-3,000,0002,000,0002,000,000-500,000
Financial calculator solution: (In millions)
Inputs: CF(0) = -3; CF(1) = 2; N(j) = 2; CF(2) = -.5.
Output: IRR% = 12.699%.



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