Question
The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $450,000. The Sisyphean Company
The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $450,000. The Sisyphean Company expects cash inflows from this project as detailed below:
| Year 1 | Year 2 | Year 3 | Year 4 |
|---|---|---|---|
| $200,000 | $225,000 | $275,000 | $200,000 |
The appropriate discount rate for this project is 16%.
The internal rate of return (IRR) for this project is closest to:
A.
42.3%
B.
18.9%
C.
22.7%
D.
34.1%
E.
39.1%
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Quantitative Analysis for Management
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Ha
12th edition
133507335, 978-0133507331
