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What is the project internal rate of return

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Reference no: EM132795509

Cardinal Company is considering a five-year project that would require a $2,955,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows:

Sales $2,871,000
Variable expenses 1,018,000
Contribution margin 1,853,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs$753,000
Depreciation 591,000
Total fixed expenses 1,344,000
Net operating income $509,000

Problem 1: What is the project's internal rate of return?

Reference no: EM132795509

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