There is a proposal to buy equipment that will cost $130,000. The new equipment will increase after tax cash flow by $30,000 during the first year. The annual cash inflow will increase by $5,000 each year, reaching $45,000 in year 4. At the end of year 4, the equipment can be sold for $20,000. What is the internal rate of return for the project (nearest 1/10 of one percent without % symbol, e.g. 12.5)?

Answer rating: 100% (QA)

To calculate the internal rate of return IRR for the project we need to find the discount rate that ... View the full answer