(Ignore income taxes in this problem.) Z Company has gathered the following data on a proposed investment project:
Investment in equipment..................................
$150,000
Annual cash flows...........................................
$40,000
Salvage value of equipment.............................
$0
Life of the equipment.......................................
10 years
Required rate of return....................................
10%
The company uses straight-line depreciation on all equipment.
Required:
(ii) Calculate the IRR
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