
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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You want to start an organic garlic farm. The farm costs $200,000, to be paid in full immediately. Year 1 cash flows will be $25,000, and grow at 5% a year into year 5 when you decide to sell the farm at the end of the year for $260,000. Assuming these estimates are all correct, what is the IRR of the garlic farm investment? Round to the tenth of a percent (eg 5.6%=5.6).
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