Home security Systems is considering an acquisition of some computer equipment costing $40,000. The equipment is expected to increase annual cash inflows for the next three years as follows:
Year Increase in Cash Flow
What is the internal rate of return using Excel. If the cost of capital is 12%, should the equipment be purchased? Explain.© BrainMass Inc. brainmass.com June 4, 2020, 4:30 am ad1c9bdddf
The solution is in Excel attached and uses the function IRR to solve and then interprets the result.