Blinken Manufacturing is considering a 3-year project with an initial cost of $780,000. The project will not directly produce any sales but will reduce operating costs by $300,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $20,000. The tax rate is 30 percent. The project will require $40,000 in extra inventory for spare parts and accessories. What is the IRR on this project, and should the project be implemented if Blinken's WACC is 8%?

Blinken Manufacturing is considering a 3-year project with an initial cost of $780,000. The project will not directly produce any sales but will reduce operating costs by $300,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $20,000. The tax rate is 30 percent. The project will require $40,000 in extra inventory for spare parts and accessories. What is the IRR on this project, and should the project be implemented if Blinken's WACC is 8%