34. Determine the internal rate of return for a project that costs -$156,000 and would yield...
34. Determine the internal rate of return for a project that costs -$156,000 and would yield after-tax cash flows of $24,000 the first year, $26,000 the second year, $29,000 the third year, $31,000 the fourth year, $35,000 the fifth year, and $41,000 the sixth year.
Homework Answers
Let irr be x%
At irr,present value of inflows=present value of outflows.
156000=24000/1.0x+26000/1.0x^2+29000/1.0x^3+31000/1.0x^4+35000/1.0x^5+41000/1.0x^6
Hence x=irr=4.82%(Approx).
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