BACKGROUND

The company ABC, L.C. manufactures some products with an average sales price of 25/unit, with fixed annual costs of 110,000. The average unit variable costs are 5.

DEVELOP

We know the following data of an investment that the company has made:

• An initial disbursement of 2,000,000 and generates the collections and payments in the successive years of its duration that are shown in the following table:

Years	Collection ()	Payments ()
1 Year 2 Year 3 Year 4 Year	4.500.000 5.500.000 6.000.000 4.000.000	3.800.000 4.500.000 5.000.000 3.200.000

Calculate the IRR of the previous project. Justify for what type of discount this investment will be made. Provide reference and computation details