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Assuming the company limits its analysis to five years

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Reference no: EM13954847

Newport Department Store is considering development of an e-commerce business. The company estimates that development requires an initial outlay of $1,470,000. Other cash flows will be as follows:
Year 1......... $700,000
Year 2......... $221,000
Year 3......... $750,000
Year 4......... $850,000
Year 5......... $940,000

Required:

Assuming the company limits its analysis to five years; estimate the internal rate of return of the e-commerce business. Should the company develop the e-commerce business if the required rate of return is 12 percent? 

Reference no: EM13954847

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