Question
Your company is thinking about investing in a huge project. The company will invest $1 million up front and $2 million per year for the
Your company is thinking about investing in a huge project. The company will invest $1 million up front and $2 million per year for the next two years. The project then generates positive cash flows of $3.4 million per year for 4 years. The project must then be shut down for refurbishment for a year at a cost of $0.8 million. It generates $3.2 million per year for the next 3 years. It must then be shut down for maintenance for a year at a cost of $1.2 million. It will then generate positive cash flows of $2.6 million per year for 2 years. Finally, the company will have to pay $1.5 million for the last year to clean up the site. How many IRRs will there be for this project?
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