Investment project R is estimated to have a net present value of $450,000 at a discounting factor of 11% and a net present value of $50,000 at a discounting factor of 13%.
Q1 Calculate the internal rate of return of the project.
The investor estimates the following figures for investment project Q:
Initial cost of project $9,500,000
Expected life of project 6 years
Total return before allowing for repairs and maintenance $18,600,000
Average cost per annum of repairs and maintenance $630,000
Q2 Calculate the average rate of return of project Q.