Mass company is investing in a giant crane. it is expected to cost $6.0 million in initial investment, and it is expected to generate an end-of-year cash flow of $3.0 million each year for three years. at the end of the fourth year, there will be a $1.0 million disposal cost. calculate the irr for the project if the cost of capital is 12%.

Question

30-06-2018
Business

contestada

Mass company is investing in a giant crane. it is expected to cost $6.0 million in initial investment, and it is expected to generate an end-of-year cash flow of $3.0 million each year for three years. at the end of the fourth year, there will be a $1.0 million disposal cost. calculate the irr for the project if the cost of capital is 12%.

Respuesta :

Otras preguntas

Which of the following assumptions made in deriving the simple deposit multiplier is unrealistic? The Fed sets the required reserve ratio. The Fed is able to af

Determine the minimum force P to prevent the 30 kg uniform rod AB from sliding. The contact surface at B is smooth, whereas the coefficient of static friction b

A horizontal steam pipe (d i = 7.8 cm, d 0 = 8.9 cm) carries saturated steam at 200.5 0 C. A 2 cm thick insulation ( k = 0.05 w/m-K) is installed to reduce heat

HELP ME NOW PLEASE An accurate clock shows 8 o'clock in the morning. Through how may degrees will the hour hand rotate when the clock shows 2 o'clock in the aft

What is x? Show your work.

Dylan tends to do his best skateboarding in torunaments when he's excited, rather than overly nervous or too calm. His experience can best be explained by ____

In controlling network traffic to minimize slow-downs, a technology called ________ is used to examine data files and sort low-priority data from high-priority

True or False: When you see a yield sign, slow down, stop if necessary, and give the right-of-way to other traffic and pedestrians. In contrast, a stop sign req

The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and depart

Nuclear scientists have synthesized approximately 1600 nuclei not known in nature. More might be discovered with heavy-ion bombardment using high-energy particl

ACCESS MORE

lilaipo lilaipo · Answer 1 · 2018-07-12T04:26:24+02:00

17.8% is the irr for the project if the cost of capital is 12%. IRR is the interest rate at which the net present value (NPV) of all the cash flows (both positive and negative) from a project or investment equal tgo zero. IRR calculations rely on the same formula as NPV does. To calculate IRR using the formula, one would set NPV equal to zero and solve for the discount rate (r), which is the IRR. Multiply the net cash flow for each period by its discount factor to obtain its present value. Sum the present values of each cash flow to calculate the NPV. Find the IRR, the discount rate, that makes the NPV zero.