Joel was evaluating the feasibility of a project that has an initial investment of $180,000 and...

 

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Joel was evaluating the feasibility of a project that has an initial investment of $180,000 and subsequent investments of $165,000 in the 1st and 2nd years. From the 3rd year onwards, it will generate cost savings of $220,000 every year for 7 years. a. If the project has a terminal value of $110,000, what is the Internal Rate of Return (IRR)? 0.00 % Round to two decimal places b. Should the project be accepted if the company's cost of capital is 25.00%? Joel was evaluating the feasibility of a project that has an initial investment of $180,000 and subsequent investments of $165,000 in the 1st and 2nd years. From the 3rd year onwards, it will generate cost savings of $220,000 every year for 7 years. a. If the project has a terminal value of $110,000, what is the Internal Rate of Return (IRR)? 0.00 % Round to two decimal places b. Should the project be accepted if the company's cost of capital is 25.00%?

Answer rating: 100% (QA)

To calculate the Internal Rate of Return IRR and assess the feasibility of the project we need to de... View the full answer