Calculate the internal rate of return

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Question - Deerfield is considering investing in a rooftop solar network to generate its own power. Any unused power will be sold back to the local utility company. Between cost savings and new revenues, the company expects to generate $1,580,000 per year in net cash inflows from the solar network installation. The solar network would cost $7.2 million and is expected to have a 18-year useful life with no residual value.

Calculate (i) the internal rate of return (IRR) and (ii) the net present value (NPV) assuming the company uses a 10% hurdle rate.

Reference no: EM133128945

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