What is the irr of the proposed power plant

Reference no: EM132087156

Question: The world's largest carpet maker has just completed a feasibility study of what to do with the 16,000 tons of overruns, rejects, and remnants it produces every year. The company's CEO launched the feasibility study by asking. Why pay someone to dig coal out of the ground and then pay someone else to put our waste into a land fill? Why not just burn our own waste? The company is proposing to build a $11-million power plant to burn its waste as fuel, thereby saving $2.7 million a year in coal purchases. Company engineers have determined that the waste-burning plant will be environmentally sound and after its five-year study period the plant can be said to a local electric utility for $4.7 million. What is the IRR of this proposed power plant? The iRR is (Round to one decimal place.)

Reference no: EM132087156

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