(Consider This) In 1975, McDonald's introduced its Egg McMuffin breakfast sandwich, which remains popular and profitable today.
1 answer:
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Answer:
a. Project’s IRR is 18.28%
b. Project should be accepted and pursued because it IRR is higher than the required rate of return.
Explanation:
Cash flows are missing a similar question is attached and followoing answer is made accordingly.
Year 0 1 2 3 NPV
Cash flows -$10,000 $0 $7,500 $8,500
PV @ 10% -$10,000 $0 $6,198 $6,386 = $2,584
PV @5% -$10,000 $0 $6,802 $7,342 = $4,144
IRR = 0.05 + ( 4,144 / (4,144-2,584)) x (0.1-0.05) = 18.28%
