Hole in Your Knees Blue Jeans Co. is considering the sale of their indigo dye facility. The facility has a remaining four years of life and would be sold for $200,000. The company would have to purchase (cash outflow) $75,000 annually in indigo dye for the next four years. Using a 10% required rate of return, compute the NPV for the decision to purchase indigo dye. Now compute the IRR for the same decision. What is your recommendation?

Answer rating: 100% (QA)

Answer 1 2 3 4 5 6 7 8 9 10 11 12 13 A year IRR B8 B Cash f... View the full answer