A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues: Year 1: $50,000Year 2: $50,000Year 3: $50,000Year 4: $60,000The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%. 2. What is the compounded return(IRR) for this project?

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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A business is considering purchasing a piece of new equipment for $200,000. The equipment will generate the following revenues:
Year 1: $50,000
Year 2: $50,000
Year 3: $50,000
Year 4: $60,000

The machine can be sold at the end of the year four for $25,000. Assume a discount of 8%.


2. What is the compounded return(IRR) for this project?

 

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