Question
A firm considers to buy a new 3D printer whose cost is $ 46 100. The cost of 3D printer will be paid in 2020.
A firm considers to buy a new 3D printer whose cost is $ 46 100. The cost of 3D printer will be paid in 2020. The expected cash flows of this investment are as follows:
2021: $ 13 200
2022: $ 13 200
2023: $ 13 200
2024: $ 13 200
2025: $ 13 200
The firm plans to sell this 3D printer at the end of 2025 and expects that it can sell the 3D printer in the market for $ 20 000 (the salvage value of the 3D printer is $ 20 000)
a) Find the Internal Rate of Return (IRR) of this project.
b) Given that the current annual interest rate is 15% and the risk premium appropriate for this investment is 5%; should the firm accept or reject this investment.
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The Everything Guide To Day Trading
Authors: David Borman
1st Edition
1440506213, 978-1440506215
