Q. For a new product, an initial investment of $500,000 is required. The revenues and costs for each of the four years of the products life are

Year Sales Revenue Costs

1 $100,000 $100,000

2 $200,000 $150,000

3 $300,000 $100,000

4 $500,000 $150,000

The expected residual value of the equipment is 10% of its first cost of $500,000 at the end of the five years. Determine the IRR of the investment.