David purchased a new printer for his book publishing company. The printer was purchased for $10,000 and is expected to generate the following cash flows for the next four years:

Year 1: $3,000

Year 2: $4,000

Year 3: $2,500

Year 4: $1,000

Assume the printer can be sold for $2,000 at the end of year 4 and David's required rate of return is 8 percent. What is David's internal rate of return if he purchases the printer? 

Answer rating: 100% (QA)

To calculate Davids internal rate of return IRR for purchasing the printer we need to consider the i... View the full answer