Products Inc

Finance Dec 26, 2020

Products Inc. is considering a project with the following cash flows: Year 0, $(365,582); Year 1, $106,717; Year 2, $152,800; Year 3, $180,093. What is the internal rate of return (IRR) on this project?

Expert Solution

Let irr be x%
At irr,present value of inflows=present value of outflows.

365,582=106717/1.0x+152800/1.0x^2+180,093/1.0x^3

Hence x=irr=9%

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