Reference no: EM131308254
For a new product, an initial investment of $500,000 is required. The revenues and costs for each of the four years of the product’s life are
Year Sales Revenue Costs
1 $100,000 $100,000
2 $200,000 $150,000
3 $300,000 $100,000
4 $500,000 $150,000
The expected residual value of the equipment is 10% of its first cost of $500,000 at the end of the five years. Determine the IRR of the investment.
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