The management at Luke Products Inc. is looking at the financials for an innovative new diaper changing station. The expected life cycle for the product is four years. The initial projected product design costs are $500,000. Management typically uses a discount rate of 10% for all new product financials.

Calculate IRR using the information in the table below and an initial investment of $500,000.
           Year               Projected Cash In-Flows ($)
           1                     130,000
           2                     250,000
           3                    300,000
           4                     100,000

Answer rating: 100% (QA)

NPV NPV is the difference between Present value of Cash Inflows and Present value of cash outflows NPV PV of Cash Inflows PV of Cash Outflows If NPV 0 Project can be accepted NPV 0 Indifference point ... View the full answer