The steel factory is considering a project that will produce annual cash flows of $36,800, $45,500, $56,200, and $21,800 over the next four years, respectively. what is the internal rate of return if the initial cost of the project is $135,000?

rate of return is 7.56 %

Explanation:

given data

annual cash flows C1 = $36,800

annual cash flows C2 = $45,500

annual cash flows C3 = $56,200

annual cash flows C4 =  $21,800

initial cost  = $135,000

to find out

internal rate of return

solution

we will apply here initial cost formula for all annual cash flow that is express as

initial cost =     .......................1

here C is annual cash flow and r is rate of return

put here value and we get r

initial cost =

135000 =

solve it and we get

r = 0.0756

so rate of return is 7.56 %

answer; 33,000;

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