Cooper Industries is considering a project that would require an initial investment of $101,000. The project would result in cost savings of $62,000 in year 1 and $70,000 in year 2. What is the internal rate of return for the project?

Question

Quizplus · Accepted Answer

To find the internal rate of return, we need to calculate the discount rate that would make the net present value (NPV) of the project's cash flows equal to zero. Using Excel or a financial calculator, we can find that the IRR is approximately 19.3%. Since this falls within the range of 18% to 20%, the answer is C.

Cooper Industries Is Considering a Project That Would Require an Initial