ter $25$: OPTIONAL Practice Questions $($EXTRA CREDIT AVAILABLE$)$

$25\mathrm{.}4$ internal Rate of Return

Emily is trying to calculate the net present value $($NPV$)$ and internal rate of return $($IRR$)$ for a new company project. She has been told that the project will require an $$862,000$ initial investment and will have annual net cash flows of $$118,000.$ She knows that her company's required rate of return is $15\%.$ Why is Emily having trouble completing her calculations?

She does not know the expenses that will be incurred by the project.

She does not know how long the project will last.

She does not know the salvage value of the equipment used for the project.

She does not know the interest rate of the loan the company will take out.

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