An advertising campaign will cost $270,000 for planning and $48,000 in each of the next six years. It is expected to increase revenues permanently by $48,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $24,000 in the first year, declining by $6,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment? The IRR is percent, which is the MARR, so the advertising campaign V a good investment. (Round to one decimal place as needed.)

An advertising campaign will cost $270,000 for planning and $48,000 in each of the next six years. It is expected to increase revenues permanently by $48,000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $24,000 in the first year, declining by $6,000 per year to zero in the fifth year. What is the IRR of this investment? If the company's MARR is 8 percent, is this a good investment? The IRR is percent, which is the MARR, so the advertising campaign V a good investment. (Round to one decimal place as needed.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 20EA: Towson Industries is considering an investment of $256,950 that is expected to generate returns of...

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