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Rachel was evaluating the feasibility of a project that has an initial investment of $190,000 and subsequent investments of $150,000 in the 1st and 2nd
Rachel was evaluating the feasibility of a project that has an initial investment of $190,000 and subsequent investments of $150,000 in the 1st and 2nd years. From the 3rd year onwards, it will generate cost savings of $235,000 every year for 10 years.
a. If the project has a terminal value of $110,000, what is the Internal Rate of Return (IRR)?
%
Round to two decimal places
b. Should the project be accepted if the company's cost of capital is 22.00%?
(click to select)YesNo
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