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MJ Corporation is considering an investment a new project that will require an investment of $400,000 in new equipment today. The equipment will be straight-line
MJ Corporation is considering an investment a new project that will require an investment of $400,000 in new equipment today. The equipment will be straight-line depreciated to zero over a 5-year period. The project will create annual sales of $300,000, with annual cost of goods at 55% of sales. The project will be evaluated over a 5-year period, and MJ believes he can sell the equipment for $40,000 at the end of the 5th year. If the tax rate for the firm is 30%, what is the IRR of this project?
17.99% | |
| 11.44% |
| 9.43% |
| 19.43% |
| 16.14% |
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