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Compute the project internal rate of return

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Reference no: EM132941329

Question - Ursus, Inc., is considering a project that would have a 12-year life and would require a $2,300,000 investment in equipment. At the end of 12 years, the project would terminate, and the equipment would have no salvage value.

Each of the 12 years, the project would provide sales of $2,400,000, incur variable expenses of 68% of sales, fixed out of pocket expenses of $230,000, and depreciation using the straight-line method. All of the revenues and expenses, except for depreciation, represent cash flows.

The company's required rate of return is 13%.

Required -

Compute the project's net present value.

Compute the project's internal rate of return.

Compute the project's payback period.

Compute the project's simple rate of return.

Reference no: EM132941329

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