Problem:
Which of the following investments yields the highest IRR using a 15% discount rate?
- a $500 investment that provides $100 per year for 10 years
- a $1,000 investment that provides nothing for 5 years than cash flows $300 for the next five years
- a $2,000 investment that provides $500 per year for 10 years
- a $4,000 investment that provides nothing for 9 years but is redeemable for $8,000 at the end of the 10th year
Note: Solve the problem and show all work.