Determining internal rate of return


A firm is evaluating an investment that costs $90,000 and is expected to generate annual cash flows equal to $20,000 for the next six years. If the firm's required rate of return is 10%, what is the net present value (NPV) of the project? What is its internal rate of return (IRR)? Should the project be purchased?

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Finance Basics: Determining internal rate of return
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