Question
A firm invests in a project that will produce a steady yearly savings of $5,050,000 starting one year from now for 30 years. The investment
A firm invests in a project that will produce a steady yearly savings of $5,050,000 starting one year from now for 30 years. The investment needed for the project is $100 million.
What is the IRR of the project?
(Hint: The savings are an annuity, so you have to use the Annuity feature in your financial calculator to find the discount rate/rate of return/IRR. Don't worry about multiple IRRs as there are no large investments in the future.)
I know we have to use the Annuity formula.
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Investments Analysis and Management
Authors: Charles P. Jones
12th edition
978-1118475904, 1118475909, 1118363299, 978-1118363294
