What is the approximate internal rate of return

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The Krick Company is adding a new assembly line at a cost of $8.5 million. The company expects the project to generate end-of-year cash flows cash flows of $2 million, $3 million, $4 million, and $5 million over the next four years. The company's cost of capital is 16%.

Required:

Problem 1: What is the approximate internal rate of return that the company can earn on this project (round to the nearest 0.5%)?

Group of answer choices

Option 1: 16%

Option 2: 20%

Option 3: 21%

Option 4: 19%

Reference no: EM132752673

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