Purchase Solution

Internal rate of return

Not what you're looking for?

Ask Custom Question

A project has an initial requirement of $1.2 million for fixed assets and $135,000 for net working capital. The fixed assets will be depreciated to a zero book value over the 6-year life of the project and have an estimated salvage value of $320,000. All of the net working capital will be recouped at the end of the project. The expected annual operating cash flow is $285,000. What is the project's internal rate of return if the tax rate is 32 percent?

1. 12.36
2. 12.49
3. 13.08
4. 13.41
5. 13.97

Purchase this Solution
Solution Summary

This explains the computation of internal rate of return

Solution Preview

A project has an initial requirement of $1.2 million for fixed assets and $135,000 for net working capital. The fixed assets will be ...

Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Operations Management

This quiz tests a student's knowledge about Operations Management

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

View More Free Quizzes
Related BrainMass Solutions

  • Ranking by the Internal Rate of Return Method

    The company has a minimum required internal rate of return of 13%. Screen and rank the eight capital investment projects using the internal rate of return.

  • Valuation Methodologies - NPV, IRR, and MIRR

    Second, "a key assumption made by the internal rate of return (IRR) method is questionable. Internal rate of return method assumes the rate of return is the internal rate of return on the project.

  • Multiple Choice

    203253 Present value When the net present value is positive: a) the internal rate of return equals the cost of capital b) the internal rate of return exceeds the cost of capital c) the internal rate of return is less than the cost of capital d)

  • Healthcare Finance: NPV and IRR

    What is internal rate of return? What are the advantages and disadvantages of each one? The internal rate of return is the interest rate that makes the Net Present Value zero.

  • Modified Internal Rate of Return

    271955 Modified Internal Rate of Return The 21st century corporation uses the modified internal rate of return. The firm has a cost of capital of 8 percent.

  • Capital budgeting Practice True False Exam Questions

    A capital budgeting project is accepted if the required rate of return equals or exceeds the internal rate of return. 5.

  • Cash Flow Problems

    Positive average accounting rate of return E. Internal rate of return that is less than the requirement 6. The net present value: A. decreases as the required rate of return increases.

  • Net Present Value & Rate of Return for a winning Powerball lottery ticket

    Internal Rate of Return What is the internal rate of return (IRR) of the Powerball deal in question 2? Modified Internal Rate of Return What is the modified internal rate of return (MIRR) of the Powerball deal in question 2?

  • Internal rate of return for an investment proposal

    Response provides the steps to compute internal rate of return for an investment proposal

  • The internal rate of return of a project

    The internal rate of return of a project is examined.

View More Related Solutions