What is the irr of the pta project

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Consider the new product launch project that Kerring-Sloan is considering. The PTA-09 project is a proposed EV Fishing Boat that requires an initial investment of $2,600,000 in production infrastructure in 2020 (year 0) for production to begin in 2021. Cash flows for the project for years 0 - 8 are shown below. The introduction of a new product at year 9 will terminate further cash flows from this project. Assume a cost of capital of 9% where necessary to solve the following problems.

Year PTA-09

0 -$2,600,000

1 $520,000

2 $850,000

3 $985,000

4 $925,000

5 $770,000

6 $500,000

7 $100,000

8 $55,000

Problem 1: Continuing with the new product launch project that Kerring-Sloan is considering. What is the IRR of the PTA-09 project?

[A] -5.89%

[B] 19.37%

[C] 18.78%

[D] 5.39%

Reference no: EM132659002

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