Slopeside Cottages is evaluating a potential renovation that will increase annual sales and cash costs by...
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Slopeside Cottages is evaluating a potential renovation that will increase annual sales and cash costs by $120,000 and $70,000, respectively. The project requires the purchase of $90,000 in fixed assets that will be depreciated straight-line to a zero book value over the 3-year life of the project. Using a 20% tax rate, what is the internal rate of return (IRR) of the project? Slopeside Cottages is evaluating a potential renovation that will increase annual sales and cash costs by $120,000 and $70,000, respectively. The project requires the purchase of $90,000 in fixed assets that will be depreciated straight-line to a zero book value over the 3-year life of the project. Using a 20% tax rate, what is the internal rate of return (IRR) of the project?
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Answer rating: 100% (QA)
To calculate the internal rate of return IRR of the project we need to determine the cash flows asso... View the full answer
Related Book For
Practical Management Science
ISBN: 978-1305250901
5th edition
Authors: Wayne L. Winston, Christian Albright
Posted Date:
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