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Assume a company can invest in equipment that will cost $ 9 0 0 , 0 0 0 and is expected to generate $ 1
Assume a company can invest in equipment that will cost $ and is expected to generate $ a year in revenue for the first three years and $ a year in revenue for the next four years. The company has the capital available for the equipment and could alternatively invest it in the stock market for an expected return of per year. The managers feel that buying the equipment or investing in the stock market are similar risks. What is the IRR for this investment and would the managers accept this investment?
; No
; Yes
; No
; Yes
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