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13) Your company is considering introducing a new product which net returns are expected to be: (4 marks -16.3 IRR CPT) $25,000 at the end
13) Your company is considering introducing a new product which net returns are expected to be: (4 marks -16.3 IRR CPT)
$25,000 at the end of years 1,2,3 and 4
$30,000 at the end of years 5,6,7 and 8
$35,000 at the end of years 9 and 10
The new product will require an immediate cash outlay of $100,000 for machinery and an additional outlay of $50,000 at the end of year 3. Find the rate of return (IRR), compounded annually, on the project.
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