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Management of Blossom, Inc., an aviation firm, is considering purchasing three aircraft for a total cost of $165,701,963. The

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Answer #1

Let irr be x%
At irr,present value of inflows=present value of outflows.

165,701,963=29075000/1.0x+29075000/1.0x^2+29075000/1.0x^3+29075000/1.0x^4+61,120,000/1.0x^5+61,120,000/1.0x^6+61,120,000/1.0x^7+76,350,000/1.0x^8+76,350,000/1.0x^9+76,350,000/1.0x^10

Hence x=irr=22.28%(Approx).

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