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Suppose that an industrial building can be purchased today for $3,290,000. If it is expected to produce cash flows of $302,000 for each of the
Suppose that an industrial building can be purchased today for $3,290,000. If it is expected to produce cash flows of $302,000 for each of the next ten years (assume CFs are received at the end of each year) and can be sold at the end of the tenth year for $4,100,000, what is the internal rate of return (IRR) on this investment? If your cost of capital is expected to be 8%, should you proceed with the investment?
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