Determine the IRR on the Following Projects

question 70

Essay

Determine the IRR on the following projects:
a. Initial outlay of $35,000 with an after-tax cash flow at the end of the year of $5,836 for seven years
b. Initial outlay of $350,000 with an after-tax cash flow at the end of the year of $70,000 for seven years
c. Initial outlay of $3,500 with an after-tax cash flow at the end of the year of $1,500 for three years

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, giving them ownership interest.

Creditors

Individuals or institutions that lend money or extend credit, and are thus owed repayment by the borrower or debtor.

Just-In-Time Inventory

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

Inventory Levels

A measure of the quantity of goods and materials on hand in a business at any given time.