The installation of the new sprinkler system

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The golf professional believes that with the installation of the new sprinkler system the club will see new members joining and golf shop revenues increasing. He estimates the club will enjoy the following incremental profits, which level off in year 5.

Incremental Profits

1. $ 150,000

2. $ 175,000

3. $ 200,000

4. $ 225,000

5. $250,000

Based on the incremental profits in table and a discount rate of 9%, calculate the PV, NPV, and IRR of the irrigation project, assuming the sprinkler system has a ten-year useful life with no salvage value at the end of ten years.

Reference no: EM132037430

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