Assume the following information for Project X: Initial investment: $50,000 Annual after-tax cash flows: $8,000 Salvage value

Question:

Assume the following information for Project X:

Initial investment: $50,000

Annual after-tax cash flows: $8,000

If the project's internal rate of return is 12.5%, what must be the life of the project (to the nearest year)?

Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...

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