Question

Red Rock Industries is considering an equipment investment that will cost $ 935,000. ­Projected net cash inflows over the equipment’s three- year life are as follows: Year 1: $ 498,000; Year 2: $ 400,000; and Year 3: $ 296,000. Red Rock wants to know the ­equipment’s IRR.

Requirement
Use trial and error to find the IRR within a 2% range. Optional: Use a business calculator or spreadsheet to compute the exact IRR.



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  • CreatedAugust 27, 2014
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