Lancer Corp. has the following information available about a potential capital investment

Required:

1. Calculate the project’s net present value.

2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 10 percent.

3. Calculate the net present value using a 20 percent discount rate.

4. Estimate the project’s IRR.

Transcribed Image Text:

Initial investment Annual net income Expected life Salvage value Lancer's cost of capital $1,300,000 $ 200,000 8 years $ 350,000 10%