Question
Cirice Corporation is considering opening a branch in another state. The operating cash flow will be $176,600 a year. The project will require new equipment
Cirice Corporation is considering opening a branch in another state. The operating cash flow will be $176,600 a year. The project will require new equipment costing $598,000 that would be depreciated on a straight-line basis to zero over the 5-year life of the project. The equipment will have a market value of $181,000 at the end of the project. The project requires an initial investment of $42,000 in net working capital, which will be recovered at the end of the project. The tax rate is 21 percent. What is the project's IRR?
Multiple Choice
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17.57%
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15.64%
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18.39%
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13.24%
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18.48%
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