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ABC company is considering whether or not to invest in a joint venture. The initial cost is $8.2 million and the estimated operating cash flows
ABC company is considering whether or not to invest in a joint venture. The initial cost is $8.2 million and the estimated operating cash flows are shown in the following table:
| Period | Cash Flow |
|---|---|
| 1 | $900,000 |
| 2 | $930,000 |
| 3 | $950,000 |
The firm's interest in the venture can be sold after three years with an estimated after-tax salvage value of $9 million. What is the IRR of this investment?
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