Question: Slopeside Cottages is evaluating a potential renovation that will increase annual sales and cash costs by $120,000 and $70,000, respectively. The project requires the

Slopeside Cottages is evaluating a potential renovation that will increase annual sales

Slopeside Cottages is evaluating a potential renovation that will increase annual sales and cash costs by $120,000 and $70,000, respectively. The project requires the purchase of $90,000 in fixed assets that will be depreciated straight-line to a zero book value over the 3-year life of the project. Using a 20% tax rate, what is the internal rate of return (IRR) of the project?

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