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4. Given the following information and assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $400,000 life= 4 years cost savings $125,000 per year salvage value = $20,000 in year 4 tax rate= 34% discount rate= 12%

4. Given the following information and assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $400,000 life= 4 years cost savings $125,000 per year salvage value = $20,000 in year 4 tax rate= 34% discount rate= 12%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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i know the answer is 7.51, but need to know how to do it without excel. if you can give a step by step that would be great.

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4. Given the following information and assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $400,000 life = 4 years cost savings $125,000 per year salvage value = $20,000 in year 4 tax rate= 34% discount rate=12% A) 6.25% B) 7.51% C) 8.15% D) 9.43% E) 10.24%
Transcribed Image Text:4. Given the following information and assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $400,000 life = 4 years cost savings $125,000 per year salvage value = $20,000 in year 4 tax rate= 34% discount rate=12% A) 6.25% B) 7.51% C) 8.15% D) 9.43% E) 10.24%
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