(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed investment project:

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.
-The internal rate of return on the investment is closest to:

Question

(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed investment project:

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.
-The internal rate of return on the investment is closest to:

Quizplus · Accepted Answer

The IRR is the discount rate that makes the NPV of the investment equal to zero. In this case, the NPV is equal to zero when the discount rate is 23%.

(Ignore Income Taxes in This Problem