Stephanie is the wage earner in a "typical family" with $36,000 gross annual income. Use the easy method to determine how much i
2 answers:
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Answer:
IRR is greater than required return by 17.38 - 16.8 % = 0.58 %
so project will accept
Explanation:
given data
initial cost = $38,000
cash inflows year 1 = $12,300
cash inflows year 2= $24,200
cash inflows year 3 = $16,100
rate of return = 16.8 %
solution
we consider here IRR is = x so
present value of inflows is equal to present value of outflows .............1
we can say that it as
initial cost = present value
3800 =
solve it we get
x = 17.38%
here IRR is greater than required return by 17.38 - 16.8 % = 0.58 %
so project will accept