A firm evaluates all of its projects by applying the IRR rule. A project under c

Question

A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following If the required return is 18 percent, what is the IRR for this project? It will cost $4,500 to acquire a small ice cream cart. Cart sales are expected to be $3,700 a year for five years. After the five years, the cart is expected to be worthless as that is the expected remaining life of the cooling system. What is the payback period of the ice cream cart? What is the net present value of a project with the following cash flows and a required return of 14 percent?

Explanation / Answer

Hello Pal,

First of all a very nice as well as intersting question from your side.

So now straight to the question, as asked above with all the information available from your side and from mine, the answer is as under:

After calculation of the above given information, we can conclude that the answer will be as under:

1) No,

2) 0.82 years.

3) -$7369.50.

That is all I can say from the above given information by you, hope have solved your problem to some extent.

Regards.

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