What is the internal rate of return on the project

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Question 1: Clear Treatment, Inc. is analyzing a proposed investment that would initially require $750,000 of new equipment. This equipment would be depreciated on a straight-line basis to a zero balance over the four-year life of the project. The estimated salvage value is $150,000. The project requires $50,000 initially for net working capital, all of which will be recouped at the end of the project. The projected operating cash flow is $ 265,000 a year. What is the internal rate of return on this project if the relevant tax rate is 21 percent?

Option A. 15.51 percent

Option B. 17.99 percent

Option C. 20.12 percent

Option D. 17.64 percent

Reference no: EM132489557

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