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You are thinking of starting an energy drink business that requires an initial investment of $ 2 0 , 0 0 0 and a major
You are thinking of starting an energy drink business that requires an initial investment of $ and a major replacement of equipment after years amounting to $ From competitive experience, you expect to have a net loss of $ the first year, a net profit of $ the second year, and, for the remaining years of the first years of operations, net returns of $ per year. After years, the net returns will gradually decline and will be zero at the end of years assume returns of $ per year for that period After years, your lease will expire. The salvage value of equipment at that time is expected to be just sufficient to cover the cost of closing the business. Calculate the internal rate of return IRR Use technology to solve the problem.
The internal rate of return is
Round to the nearest tenth as needed.
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