Question: Question 21 3 pts [Part 2. The same information as above.] You work for personal transport firm. The CEO walks into your office and asks
![Question 21 3 pts [Part 2. The same information as above.]](https://s3.amazonaws.com/si.experts.images/answers/2024/09/66e124c648f05_04566e124c5debe5.jpg)
Question 21 3 pts [Part 2. The same information as above.] You work for personal transport firm. The CEO walks into your office and asks for advice concerning the purchase of a firm producing passenger drones, Yworry Corp. The CEO's analysts estimate that Yworry will generate $60 million in cash flow in one year; i.e., at the end of next year. After that, they expect that these cash flows will grow at 4% per year, forever. The discount rate is 14%. Your company can acquire this form for $500 million. The CEO asks: "If we acquire this form for $500 million as planned, what is the IRR on our investment?" In your answer to the CEO, show the IRR as a percentage with 2 decimal places. Omit the % sign. For example, if your answer is 0.11111 = 11.111%, input 11.11
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
