What is the internal rate of return for project

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1. Drummond Corporation is considering making an investment in Project A, which will require an initial cash outlay of $20,000. Project A is expected to generate cash inflows of $6,000 for year 1, $8,000 for year 2, $10,000 for year 3, and $7,000 for year 4. The firm's hurdle rate is 12%. What is the internal rate of return for Project A?

A. 16.98%

B. 19.29%

C. 21.23%

D. 24.76%

2. Wagner Tools is analyzing the purchase of a new machine costing $155,000. The company expects to realize net savings of $30,000 per year for the next 7 years. What is Wagner's internal rate of return (IRR) on this investment?

A. 6.72%

B. 7.32%

C. 8.22%

D. 9.52%

Reference no: EM131579084

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