Problem:
The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $450,000. The Sisyphean Company expects cash inflows from this project as detailed below:
Year One Year Two Year Three Year Four
$200,000 $225,000 $275,000 $200,000
The appropriate discount rate for this project is 16%.
The IRR for this project is closest to:
Choose one answer.
a. 18.9%
b. 22.7%
c. 39.1%
d. 34.1%