Help me in this questionpart (a) and Part(b) both An investment of $875,000 in equipment will produce annual profits of $175,000 for eight years. The equipment will have a residualvalue of $40,00o.a) What is the IRR of the proposed investment? (Round your final answer to 2 decimal places.)IRRb) Should the equipment investment be undertaken if the cost of capital is 10.5%?O YesO No

Cost = $ 875000 Annual cash inflow = $ 175000 Salvage value = $ 40000 Project life = 8 Years

An investment of $875,000 in equipment will produce annual profits of $175,000 for eight years. The equipment will have a residual value of $40,000. a) What is the IRR of the proposed investment? (Round your final answer to 2 decimal places.) IRR b) Should the equipment investment be undertaken if the cost of capital is 10.5%? O Yes ONo

An investment of $875,000 in equipment will produce annual profits of $175,000 for eight years. The equipment will have a residual value of $40,000. a) What is the IRR of the proposed investment? (Round your final answer to 2 decimal places.) IRR b) Should the equipment investment be undertaken if the cost of capital is 10.5%? O Yes ONo

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 27P

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