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What is the internal rate of return

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John was evaluating the feasibility of a project that has an initial investment of $220,000 and subsequent investments of $170,000 in the 1st and 2nd years. From the 3rd year onwards, it will generate cost savings of $210,000 every year for 6 years.

a. If the project has a terminal value of $90,000, what is the Internal Rate of Return (IRR)?

b. Should the project be accepted if the company's cost of capital is 22.00%?

Reference no: EM133113350

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