St. Lawrence Bus Lines is offered a contract for busing schoolchildren that will produce an annual profit of $36,000 for seven years. To fulfill the contract, St. Lawrence would have to buy three buses at a total cost of $165,000. At the end of the contract the resale value of the buses is estimated to be $40,000. Determine the IRR on the school bus contract.

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The Answer of St. Lawrence Bus Lines is offered a contract for busing schoolchildren that will produce an annual profit of $36,000 for seven years. To fulfill the contract, St. Lawrence would have to buy three buses at a total cost of $165,000. At the end of the contract the resale value of the buses is estimated to be $40,000. Determine the IRR on the school bus contract.

St Lawrence Bus Lines Is Offered a Contract for Busing