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What is the project internal rate of return

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Question - Pitcher Clinic has a Corporate Cost of Capital of 10% and is evaluating a project that requires an initial investment of $850,000. Pitcher has assessed the project as being of average risk and anticipates the following cash flows (including terminal value) from the project:

Initial investment $(850,000)

Year 1 $150,000

Year 2 $175,000

Year 3 $200,000

Year 4 $202,000

Year 5 $225,000

Year 6 $250,000

Required -

a. What is the project's payback period?

b. What is the project's net present value?

c. What is the project's internal rate of return?

d. Is the project acceptable from a financial standpoint? Why?

Reference no: EM133111553

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