Internal rate of return
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A project has an initial requirement of $1.2 million for fixed assets and $135,000 for net working capital. The fixed assets will be depreciated to a zero book value over the 6-year life of the project and have an estimated salvage value of $320,000. All of the net working capital will be recouped at the end of the project. The expected annual operating cash flow is $285,000. What is the project's internal rate of return if the tax rate is 32 percent?
1. 12.36
2. 12.49
3. 13.08
4. 13.41
5. 13.97
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This explains the computation of internal rate of return
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A project has an initial requirement of $1.2 million for fixed assets and $135,000 for net working capital. The fixed assets will be ...
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