Question
Singular Construction is evaluating whether to build a new distribution facility. The proposed investment will cost Singular $4 million to construct and provide cash savings
Singular Construction is evaluating whether to build a new distribution facility. The proposed investment will cost Singular $4 million to construct and provide cash savings of $500,000 per year over the next 10 years.
1. What rate of return does the investment offer
2.If Singular were to invest another $200,000 in the facility at the end of 5 years, it would extend the life of the project for 4 years, during which time it would continue receiving cash savings of $500,000. What is the internal rate of return for this investment?
Need breakdown of formula nad solution, thank you
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