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Rochester Mobile is considering a project with an initial cost of $108,400. The projects cash inflows for years 1 through 3
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Answer #1

Let the IRR be x.

Now , Present Value of Cash Outflows=Present Value of Cash Inflows

108,400 = 35200/(1.0x) +52600/ (1.0x)^2 +46900/(1.0x)^3      

Or x= 11.15%

Hence the IRR is e. 11.15 percent

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