Chapter 26, Problem 26.17EX

(a)

To determine

Internal rate of return method:

Internal rate of return method is one of the capital investment methods which determine the rate of return, wherein the net present value of all the cash flows (both positive and negative) from an investment is zero. This method is also called as the time-adjusted rate of return method. It used to evaluate the different proposal’s expected rate of return.

The internal rate of return for the given project

(b)

To determine

To identify:  The uncertainties that could reduce the internal rate of return of the C Resort.