Calculate internal rate of return of this unusual project

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Reference no: EM132018568

Crestco Car Mechanics, Inc. has decided to sell its computer diagnostic equipment and instead to hire more mechanics to work on cars. The sale of the equipment will bring in the amount of $800 immediately. The hiring of the new mechanics will require the company to make an additional investment in the business of -$181 at the end of each year, beginning in one year, that continues for a total of 6 consecutive years. Calculate the internal rate of return (IRR) of this unusual project. % Place your answer in percentage form with one decimal place of accuracy and no percentage sign. While we usually seek additional precision, the calculation of the IRR without the use of a financial calculator can be overly burdensome. Therefore, answers in percentage form with one degree of accuracy is acceptable here. That is, if your answer is five point six percent, place your answer as 5.6 and not as .056. Second Part Based upon the IRR decision rule, should the company accept the project if the required rate of return is 8.5%?

Reference no: EM132018568

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