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Year investment. Operating income 0 1 0 0 , 0 0 0 1 0 2 5 , 0 0 0 3 5 , 0 0

Year investment. Operating income
0100,000
10
25,000
35,000
410,000
55,000
Debt cost 6.0%
Equity cost 14.0%
WACC. 9.0%
1.0 What is the IRR for this investment?
2.0 An increase in borrowing costs has increased the WACC to 11 percent. Should they still invest?

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