A project requires an initial investment of $28.16 million to buy new equipment, and will provide after-tax cash flows of $11 million per year for 4 years. What is the project's internal rate of return?

A project requires an initial investment of $28.16 million to buy new equipment, and will provide after-tax cash flows of $11 million per year for 4 years. What is the project's internal rate of return?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A project requires an initial investment of $28.16 million to buy new equipment, and will provide after-tax cash flows of $11 million per year for 4 years.

What is the project's internal rate of return?

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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