Problem:
Phili Steel plans to build a factory in Tulsa, Oklahoma to manufacture and sell custom steel products. The new facility requires an initial investment of $50 million. Over the next 5 years, Phili plans to reinvest 100 percent of the free cash flow from the project to expand production capacity at the Tulsa plant.
Required:
Question: Assuming that Phili expects to sell the steel plant for $102 million at the end of five years, determine the Internal Rate of Return for the project.
Note: Explain all steps comprehensively.