Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Cirice Corporation is considering opening a branch in another state. The operating cash flow will be $154,200 a year. The project will require new equipment
costing $601,000 that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will have a market value of $183,000
at the end of the project. The project requires an initial investment of $42,500 in net working capital, which will be recovered at the end of the project. The tax rate
is 21 percent. What is the project's IRR?
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Transcribed Image Text:Cirice Corporation is considering opening a branch in another state. The operating cash flow will be $154,200 a year. The project will require new equipment costing $601,000 that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The equipment will have a market value of $183,000 at the end of the project. The project requires an initial investment of $42,500 in net working capital, which will be recovered at the end of the project. The tax rate is 21 percent. What is the project's IRR?
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