What is the irr and should you buy chanel


Problem

Now that Tom Ford sold his brand, you are considering if your firm should buy the Chanel brand. You think you can buy the brand for $12 billion today. You'll then make 1.25 billion per year for the next 10 years starting a year from today. At the end of the project, you'll lose $1.5 billion after the Big Flap bag becomes the Big Bust bag. At that point you'll shut down Chanel. What is the IRR and should you buy Chanel if your discount rate is 10%?

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Financial Accounting: What is the irr and should you buy chanel
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