Assume That an Industrial Building Can Be Purchased for $1,500,000

Multiple Choice

Assume that an industrial building can be purchased for $1,500,000 today,is expected to yield cash flows of $80,000 for each of the next five years,and can be sold at the end of the fifth year for $1,625,000.Calculate the internal rate of return (IRR) for this transaction.

A) 3.14%
B) 7.07%
C) 9.20%
D) 10.37%