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J&P Company is planning to install a new machinery that will cost RO.60,000 and has a useful life of 5 years with RO.3,000 salvage value.
J&P Company is planning to install a new machinery that will cost RO.60,000 and has a useful life of 5 years with RO.3,000 salvage value. The CFAT from the investment for the five years will be RO12,000 (Year 1), RO14,000 (Year 2), RO16,000 (Year 3), RO18,000 (Year 4) and RO15,000 Year 5. You are requested to calculate Internal Rate of Return. Note. You can use 5% and 15% as discount rate for lower and higher rate to calculate IRR.
a.
RO.18.5%
b.
RO.16%
c.
RO.17%
d.
None of the options
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