You are considering investing in a security that will pay you $80 in interest at the end of each of the next 10 years. If this security is currently selling for $588.81, then the IRR for investing in this security is closest to:

the internal rate of return is 6%

Explanation:

The computation of the irr is shown below

Given that

Initial investment = $588.81

And yearly cash flows for the next 10 years is $80

Now for determining the internal rate of return we have to apply the formula

= IRR()

After applying the internal rate of return formula, the internal rate of return is 6%

Hence, the internal rate of return is 6%

Independent variable

Explanation: In simple words, independent variables refers to the variables whose variations do not depend on some other related factor.

In the given case, when the price of the premium brand decreases then the sales of brand decreases and vice -versa. However there is nothing mentioned about how the price changes.

Thus, the sales of brand depends on price but the price does not depend on the sales of the brand.

Hence from the above we can conclude that the changes in price represents the independent variables.