Question
I'm having a hard time calculating the IRR. Would someone mind going into detail on how to calculate it? This is the question I'm working
I'm having a hard time calculating the IRR. Would someone mind going into detail on how to calculate it? This is the question I'm working on.
You are considering opening a new plant. The plant will cost 98.5 million upfront and will take one year to build. After that, it is expected to produce profits 28.7 of million at the end of every year of production (starting two years from now). The cash flows are expected to last forever. The cost of capital is 8.2%. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged.
In previous parts of the question, I've calculated NPR = 225 million.
Thank you so much!
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