A company is considering a project that would cost K290,000 now, and would earn the following...

 

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A company is considering a project that would cost K290,000 now, and would earn the following cash profits. Year K Year K 1st year 80,000 3rd year 100,000 60,000 2nd year 120,000 4th year The capital equipment purchased at the start of the project could be resold for K50,000 at the start of the fifth year. The company's required minimum rate of return is 12%. Required: Compute the project's internal rate of return (IRR) and advise whether the company should undertake the project. (25 Marks) A company is considering a project that would cost K290,000 now, and would earn the following cash profits. Year K Year K 1st year 80,000 3rd year 100,000 60,000 2nd year 120,000 4th year The capital equipment purchased at the start of the project could be resold for K50,000 at the start of the fifth year. The company's required minimum rate of return is 12%. Required: Compute the project's internal rate of return (IRR) and advise whether the company should undertake the project. (25 Marks)

Answer rating: 100% (QA)

At Internal rate return of Net Present value is zero which ... View the full answer