Question
7Your company is considering introducing a new product which net returns are expected to be: (6 marks) $10,000 at the end of years 1,2 and
7Your company is considering introducing a new product which net returns are expected to be: (6 marks)
$10,000 at the end of years 1,2 and 3
$20,000 at the end of years 4,5,6 and 7
$30,000 at the end of years 8 and 9
The new product will require an immediate cash outlay of $100,000 for machinery and an additional outlay of $18,000 at the end of year 6. Find the rate of return (IRR), compounded annually, on the project.
8) Find the rate of return (IRR) on a project that will cost $200,000 today and $400,000 in 4 years from today, BUT will return $100,000 at the end of every year for 10 years (3)
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