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# Net Present Value

A networking firm is considering purchasing a new network that costs \$82k. It requires an additional working captial of \$13k. It has an anticipated 80 year life that will generate an additional revenue of \$33k per year with operating cost of \$15k, excluding depreciation. At the end of its life it will have a salvage value of \$9,500 and return of \$5,000 in working capital, we also do not consider taxes.

1: What will be the internal rate of return?
2: Lets assume the firm has a required rate of return of 14% what is the net present value of the proposed investmen?

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A networking firm is considering purchasing a new network that costs \$82k. It requires an additional working capital of \$13k. It has an anticipated 80 year life that will generate an additional revenue of \$33k per year ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer what will be the internal rate of return.

\$2.19