The IRR for Galt Motors of manufacturing the armatures in house is closest to:
A) 48%
B) 49%
C) 50%
D) 53%

Name: The IRR for Galt Motors of manufacturing the armatures in house is closest to: A) 48% B) 49% C) 50% D) 53%
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Question

Quizplus · Accepted Answer

C) CF0 = -700,000 + - 40,000 = -740,000
CF(1 - 9) = 500,000 units × ($2.50 - $1.80) + .35 × 700,000/10 = 374,500
CF(10) = 500,000 units × ($2.50 - $1.80) + .35 × 700,000/10 + 40,000 = 414,500
CF0 = -740000, CFj = 374500. nj = 9, CFj = 414500, Nj = 1, I = 14, compute IRR = 49.7639%

The IRR for Galt Motors of Manufacturing the Armatures in House