Project X has an initial investment cost of $20.0 million. After 10 years it will have a salvage value of $2.0 million. This project will generate annual revenues of $5.5 million per year and will have an annual operating cost of $1.8 million. What is the internal rate of return of this investment, assuming a 10-mar life of the project?
Project X has an initial investment cost of $20.0 million. After 10 years it will have a salvage value of $2.0 million. This project will generate annual revenues of $5.5 million per year and will have an annual operating cost of $1.8 million. What is the internal rate of return of this investment, assuming a 10-mar life of the project?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Project X has an initial investment cost of $20.0 million. After 10 years it will have a salvage value of $2.0 million. This project will generate annual revenues of $5.5
million per year and will have an annual operating cost of $1.8 million. What is the internal rate of return of this investment, assuming a 10-year life of the project?
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