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Which is irr of each option and which is a better investment

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Question

Compare the IRR for two investment options described below. Each requires an investment of $10,000 and pays back $12,600. Which is the IRR of each option and which is a better financial investment?

Investment 1: Initial investment of $10,000 that pays back over 4 years with $4,900 in year 1, $3,900 in year 2, $2,800 in year 3 and $1,000 in year 4.

Investment 2: Initial investment of $10,000 that pays back over 3 years with $4,200 in each year.

Reference no: EM132380513

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