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What is the internal rate of return

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Question - Harry Corp buys equipment for $222,474 that will last for 10 years. The equipment will generate cash flows of $41,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 12% required rate of return.

(a) What is the Present Value (PV) of this investment (at 12%)?

(b) What is the NET Present Value (NPV) of this investment? If you need 12% should you buy the equipment?

(c) What is the Internal Rate of Return (IRR) of this investment?

(d) What is the payback period?

Reference no: EM132095753

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