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Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250
Textbook Problem

IRR Refer to problem 11-1. What is the project’s IRR?

Summary Introduction

To calculate: The IRR of the given project.

Introduction:

Internal Rate of Return (IRR):

It refers to the rate of return that is computed by the company to make a decision for selection of a project for investment. This rate provides the basis for selection of projects with lower cost of capital and rejection of project with higher cost of capital.

Explanation

Given information:

Cost of the project is $65,000.

Life of project is 9 years.

Cash inflow from project per year is $12,000.

The project’s cost of capital is 09% or 0...

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