Suppose the project requires initial investment of $10000 and expects to receive annual end-of-year perpetual payments....

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Suppose the project requires initial investment of $10000 and expects to receive annual end-of-year perpetual payments. The f

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Answer 1

Answer #1

Calculation of IRR of project:

Initial investment= cash flow*(1+growth)/return

10000= 904*(1+0.035)/return

Return= 935.64/10000= 0.0936

IRR is 9.36

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Answer 2

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