A project has a first cost of S120,000 and an estimated salvage value of $20,000 at the end of 25 years. Estimated average annual receipts are 527,900. Estimated average annual disbursements for...

A project has a first cost of S120,000 and an estimated salvage value of $20,000 at the end of 25 years. Estimated average annual receipts are 527,900. Estimated average annual disbursements for everything except income taxes are 515,060. Estimated average annual disbursements for income taxes are 54,420. Assuming that annual receipts and disbursements will be uniform throughout the 25 years, analyze the above data and compute internal rate of return. Comment whether this project is viable if the Bank offer an interest rate of 8% on loan.